UK life assurance companies carry on a basic life assurance and general annuity business. (‘BLAGAB’) Companies that carry on BLAGAB are subject to different rules of taxation in the UK. So for CFC purposes there are special rules for ascertaining the ‘appropriate rate’ of tax and ‘creditable tax’ on the apportionment of the chargeable profits and creditable tax of a CFC where the relevant interest or part of a relevant interest is held by a UK resident company carrying on BLAGAB. These rules reflect the tax treatment of UK life assurance business.

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