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On the Income Tax, especially in reference to its Incidence on Assurance Companies

Published online by Cambridge University Press:  18 August 2016

Arthur Hutcheson Bailey
Arthur Hutcheson Bailey
Affiliation:
London Assurance Corporation
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Extract

In an article on Life Assurance that appeared in the Economist some time ago, the following passage occurs:—“We should be “all the more sanguine of future success if the purely actuarial “element were given somewhat less prominence and power in the “direction of the offices. The fact that they (i.e., the actuaries) “are immersed in mathematical abstractions is calculated to “impair their efficiency as men of business. They are not “brought sufficiently in contact with the public to know and “appreciate their wants, or to discover the best means of satisfying them. They are men of the study rather than of the “market place.”

Type
Research Article
Information
Journal of the Institute of Actuaries , Volume 25 , Issue 5 , January 1886 , pp. 314 - 326
Copyright
Copyright © Institute and Faculty of Actuaries 1886

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References

* The form in which the return has been made by the London Assurance since the judgement of the House of Lords was given, and which has been approved by the revenue authorities, is as follows:

Let m=marine profit of the year.

f=fire profit of the year.

l=surplus of the life department ascertained at the last quinquennial valuation.

i=interest on all the funds, except the life funds.

e=expenses.

t=interest on all the funds from which the tax has been deducted.

P=profit on which income tax is payable.

Then

But the tax has already been paid upon t, by deduction at the source. If, therefore, P < t, no further payment has to be made. If, on the contrary, P > t, the amount to be paid is the tax on P-t.