Regulation 6
Transfer-out amounts for qualifying businesses
of Income Tax (Deduction for Special Reserves of Approved General Insurers) Regulations 2006
Subregulation 1
For the purposes of regulation 4 and subject to paragraph (2), the transfer-out amount for a qualifying business dealing with any of the offshore risks described in regulation 3(a) to (e) for the basis period for any year of assessment shall be an amount determined in accordance with the formula NCI – (TR × PE)whereNCIis the total amount of the net claims incurred during the basis period with respect to the offshore risks in the qualifying business; TRis the percentage specified in column (C) in the Schedule for offshore risks in the qualifying business; and PEis the total amount of the premiums earned during the basis period with respect to the offshore risks in the qualifying business.
Subregulation 2
If, in the basis period for any year of assessment, the amount of the special reserves of an approved general insurer with respect to a qualifying business (referred to in this regulation as the triggering business) is less than the amount determined in accordance with paragraph (1) for the triggering business —
the transfer-out amount for the triggering business shall be the amount of the special reserves with respect to the triggering business; and
the transfer-out amount for each of the qualifying businesses other than the triggering business shall be the sum of —
an amount determined in accordance with paragraph (1) for that qualifying business; and
a pro-rated amount determined in accordance with paragraph (3) for that qualifying business.
Subregulation 3
The pro-rated amount referred to in paragraph (2)(b)(ii) for each of the qualifying businesses other than the triggering business shall be determined in accordance with the formula(SRTF/SRTotal) × SwhereSRTFis the amount of special reserve as at the end of the basis period with respect to that qualifying business; SRTotalis the total amount of special reserves as at the end of the basis period with respect to all qualifying businesses other than the triggering business; and Sis the difference between the amount of the special reserves with respect to the triggering business and the amount determined in accordance with paragraph (1) for the triggering business.
Subregulation 4
For the purposes of paragraphs (2) and (3), “qualifying businesses other than the triggering business” does not include the qualifying businesses dealing with the offshore risks described in regulation 3(f) and (g).
Subregulation 5
The transfer-out amount for a qualifying business dealing with the offshore risk described in regulation 3(f) for the basis period for any year of assessment shall be the amount by which net claims settled with respect to the offshore risk in the qualifying business exceeds net premiums written with respect to the same during the basis period.