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Transitional accounting rules applied changes in the rate of tax. The rules relating to rate changes in periods prior to 1 June 2017 are detailed below. The rules for changes in rate from 1 June 2017 are detailed in V18.116. Where an insurer used the cash receipts basis, the new rate applied to premiums received on or after the date of the rate change regardless of the contract inception date. For insurers using the special accounting scheme¹ a concessionary period was sometimes allowed before the new rate became effective. In general, the rules were where that a special accounting scheme was used, and a concessionary period was been granted, any additional premiums written on or after the implementation date but relating to contracts incepting before that date were liable to tax at the old rate provided that the tax point relating to that instalment occurred before the end of the transitional period and did not relate to a new risk.

Where a special accounting scheme was used and a concessionary period was not granted, the