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The Actuary The magazine of the Institute & Faculty of Actuaries

PBR indicates little news for insurers

Trevor Fannin, a member of the Profession’s Life Office Taxation Working Party, gives a view on the Budget

Last year’s pre-Budget Report, released in November 2008, had been expected to involve material tax changes and an expansion of public spending to boost the economy. In the end it proved very uninteresting, with little to affect the taxation of life assurance companies. The areas likely to be of most interest to life actuaries include:

>> Changes to the taxation of foreign profits in the Finance Bill 2009 to grant an exemption from tax on foreign dividends received by companies

>> The proposed new higher rate of income tax of 45% from April 2011 for those with incomes above £150 000. This will change the relative attractiveness of investments held in life insurance funds compared with those held directly by investors (such as unit trusts and OEICs) and so merits careful consideration.