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Accounting and Tax Changes to a Company Owned Investment Bond

DawnyDawny Settling In NicelyMAAT, AAT Licensed Accountant Posts: 60
A client of mine is a director of a micro entity, end of year is 31st March, and the company holds an insurance bond.

I understand that I can prepare micro accounts, FRS 105, and show the insurance bond as historical cost and that the full gain (hopefully) would be taxed when the bond is surrendered.

However I'm wondering if I should prepare the accounts under FRS102 and show the bond at fair values. I have been advised that as the accounting basis is changing, I could spread the tax payable on the resulting gain over ten years but I cannot find any documentation confirming that this is allowable.

Also, would I then have to show the deferred tax in the accounts?

Thanking any help in advance.

Best Answer


  • DawnyDawny Settling In Nicely MAAT, AAT Licensed Accountant Posts: 60
    Thank you.
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