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In the case of captives using annual accounting, the same rules apply as to other CFCs. Some captive insurers use funded, or non-annual accounting (see GIM4140), although this is no longer available under UK accounting following the 2005 ABI SORP. Where the accounting is non-annual, the delay in closing the underwriting year may make it difficult for the UK parent of the captive to ascertain whether the captive it is subject to a lower level of taxation, and hence whether it falls within the definition of a CFC. In addition to this a CFC which uses funded accounting will not usually finalise its accounts early enough for it to be able to pursue an ADP within the normal 18 month time limit. »Ê¹ÚÌåÓýappre are, therefore, special rules governing the time limits for amending returns, opening enquiries, and the payment of dividends. »Ê¹ÚÌåÓýappse have important implications for risk assessment.

INTM213010 to INTM213100 contain detailed guidance on the application of the CFC rules to CFCs carrying on general insurance business. »Ê¹ÚÌåÓýapp following paragraphs summarise this guidance and give examples of its application.