Draft Risk Transformation Regulations 2017 Draft Risk Transformation (Tax) Regulations 2017

Nigel Mills Excerpts

Wednesday 29th November 2017 General Committees

[Nigel Mills (Amber Valley) (Con)]

I have a few words on the regulations before us, rather than generally on the insurance market. I warmly welcome the fact that we are trying to reform our regulatory rules and tax rules to make sure that this kind of work can be done onshore in the UK, rather than offshore in a collection of our overseas territories and Crown dependencies. The right answer for our economy has to be to try to have this work carried out in the UK, rather than risk it all being done offshore. I would hope it would be the right answer for all the investors who would like to get into the market: to realise they can now do the work in a well-regarded, well-reputed, transparent and clean financial market, rather than risk being tainted by the various scandals that sadly seem to exist in some of our overseas territories, where we cannot quite yet convince them to have the levels of transparency that we would like. Perhaps I will not drag the Minister down this line; we will leave it for another day.

I always get a little nervous when we create new tax exemptions. The important thing is to make sure that it applies only to those entities that are carrying out this work and which we intend this perfectly sensible tax treatment for. This market does not work if we tax the investment vehicle rather than the investors.

The definition in the regulations is that it is a company that

“carries out the activity of insurance risk transformation”.

Will the Minister confirm that he is happy that that definition is sufficiently tightly defined so that other people cannot pretend that another activity can be done by one of these companies and be done tax-free, and groups cannot reinsure their own costs and somehow disappear that money from UK tax? I am sure it all links to how the regulations works. The definitions are there, but I cannot see, from what is written in the order, that they are as strong as I would like them to be.