Finance Act 2012

Taxation of Chargeable Gains Act 1992

80 (1) Section 210A (ring-fencing of losses) is amended as follows.

(2) For subsection (2) substitute—

“(2) Non-BLAGAB allowable losses accruing to an insurance company are allowable as a deduction from the shareholders’ share (if any) of the BLAGAB chargeable gains accruing to the company (but are not otherwise allowable as a deduction from the BLAGAB chargeable gains accruing to the company).”

(3) For subsections (10) and (10A) substitute—

“(10) For the purposes of this section the “shareholders’ share” of BLAGAB chargeable gains or BLAGAB allowable losses accruing to an insurance company in an accounting period is determined as follows.

(10A) If the company has an I - E profit for the accounting period—

(a) find the percentage (including, if applicable, nil) of the I - E profit that is not represented by the policyholders’ share of that profit as determined in accordance with section 103 of the Finance Act 2012, and

(b) then multiply that percentage by the amount of the BLAGAB chargeable gains or BLAGAB allowable losses.

The result is the shareholder’s share of the BLAGAB chargeable gains or BLAGAB allowable losses.

(10B) If the company does not have an I - E profit for the accounting period, the shareholders’ share of the BLAGAB chargeable gains or BLAGAB allowable losses is nil.

(10C) In determining for the purposes of subsections (10A) and (10B) whether or not the company has an I - E profit for an accounting period, assume that non-BLAGAB allowable losses cannot be deducted to any extent from BLAGAB chargeable gains (and, accordingly, assume that section 95 is not included in the Finance Act 2012).”

(4) In subsection (11)—

(a) for “the policy holders’ share” substitute “the shareholders’ share”, and

(b) for “subsection (10)” substitute “subsections (10) to (10C)”.

(5) Omit subsection (12).

(6) In subsection (13)—

(a) in the definitions of “BLAGAB allowable losses” and “BLAGAB chargeable gains”, for “(in accordance with section 432A of the Taxes Act)” substitute “, in accordance with Chapter 4 of Part 2 of the Finance Act 2012,”, and

(b) omit the definitions of “the relevant profits” and “the policy holders’ share of the relevant profits” (together with the “and” before the definition of “the relevant profits”).