Taxation of Chargeable Gains Act 1992

Chapter III U.K. Insurance

[F1 204 Policies of insurance and non-deferred annuities U.K.

(1) A gain accruing on a disposal of, or of an interest in, the rights conferred by a non-life policy of insurance is not a chargeable gain (but see subsection (2)).

(2) If a disposal is of, or of an interest in, the rights conferred by a non-life policy of insurance of the risk of—

(a) any kind of damage to assets, or

(b) the loss or depreciation of assets,

the exemption under subsection (1) does not apply so far as those rights relate to chargeable assets.

(3) For this purpose “chargeable assets” means assets on the disposal of which a chargeable gain—

(a) may accrue, or

(b) might have accrued.

(4) Nothing in subsections (1) and (2) prevents sums received under a non-life policy of insurance of the risk of—

(a) any kind of damage to assets, or

(b) the loss or depreciation of assets,

from being sums derived from the assets for the purposes of this Act (and, in particular, for the purposes of section 22).

(5) A gain accruing on a disposal of, or of an interest in, the rights conferred by a contract for an annuity is not a chargeable gain if the annuity is—

(a) a non-deferred annuity, or

(b) an annuity granted (or deemed to be granted) under the Government Annuities Act 1929.

(6) If any investments or other assets are, in accordance with a policy issued in the course of life assurance business carried on by an insurance company, transferred to the policy holder—

(a) the policy holder's acquisition of the assets, and

(b) the disposal of the assets to the policy holder,

are to be taken for the purposes of this Act to be for a consideration equal to the market value of the assets.

(7) In this section “interest”, in relation to any rights, means an interest as a co-owner of the rights.

(8) It does not matter—

(a) whether the rights are owned jointly or in common, or

(b) whether or not the interests of the co-owners are equal.

(9) In this section a “non-deferred annuity” means an annuity—

(a) which is not granted under a contract for a deferred annuity, and

(b) which is granted in the ordinary course of a business of granting annuities on the life of any person,

and it does not matter whether the annuity includes instalments of capital.

(10) In this section a “non-life policy of insurance” means—

(a) a contract made in the course of a capital redemption business, [F2 within the meaning of] [F3 section 56(3) of the Finance Act 2012], and

(b) any F4 ... policy of insurance which is not a policy of insurance on the life of any person.]

Textual Amendments

F1 S. 204 substituted (with effect in accordance with s. 73(4) of the amending Act) by Finance Act 2006 (c. 25), s. 73(2)

F2 Words in s. 204(10) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 61(a) (with Sch. 7 Pt. 2)

F3 Words in s. 204(10)(a) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 79

F4 Word in s. 204(10) repealed (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 61(b), Sch. 27 Pt. 2(7) (with Sch. 7 Pt. 2)

205 Disallowance of insurance premiums as expenses. U.K.

Without prejudice to the provisions of section 39, there shall be excluded from the sums allowable as a deduction in the computation of the gain accruing on the disposal of an asset any premiums or other payments made under a policy of insurance of the risk of any kind of damage or injury to, or loss or depreciation of, the asset.

F5 206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F5 S. 206 repealed (27.7.1993, the repeal of subsections (2)-(5) having effect for the year 1994-95 and subsequent years of assessment, the repeal of subsection (1) having effect for the year 1992-93 and subsequent years of assessment, as mentioned in Notes 4, 5) by 1993 c. 34, s. 213, Sch. 23 Pt. III Table(12) Notes 4, 5; S. 206 further amended (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by 1993 c. 34, ss. 183(7), 184(3)

F6 207 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F6 S. 207 repealed (27.7.1993 with effect for the year 1994 and subsequent underwriting years as mentioned in Note 2) by 1993 c. 34, s. 213, Sch. 23 Pt. III Table(12) Note 2

F7 208 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F7 S. 208 repealed (27.7.1993 with effect for the year 1994 and subsequent underwriting years as mentioned in Sch. 23, Pt. III Table (12) Note 2) by 1993 c. 34, s. 213, Sch. 23 Pt. III Table(12) Note 2

F8 209 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F8 S. 209 repealed (27.7.1993, the repeal of subsections (1)(2)(6) having effect for the year 1994-95 and subsequent years of assessment, the repeal of subsections (3)-(5) having effect for the year 1992-3 and subsequent years of assessment, as mentioned in Notes 4, 5) by 1993 c. 34, s. 213, Sch. 23 Pt. III Table(12) Notes 4, 5; s. 209 further amended (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment as mentioned in s. 184(3)) by 1993 c. 34, ss. 183(8)(a)(b), 184(3)

[F9 210 Life assurance and deferred annuities. U.K.

(1) This section has effect in relation to any policy of insurance or contract for a deferred annuity on the life of any person.

(2) A gain accruing on a disposal of, or of an interest in, the rights conferred by the policy of insurance or contract for a deferred annuity is not a chargeable gain unless subsection (3) below applies.

(3) This subsection applies if—

(a) (in the case of a disposal of the rights) the rights or any interest in the rights, or

(b) (in the case of a disposal of an interest in the rights) the rights, the interest or any interest from which the interest directly or indirectly derives (in whole or in part),

have or has at any time been acquired by any person for actual consideration (as opposed to consideration deemed to be given by any enactment relating to the taxation of chargeable gains).

(4) For the purposes of subsection (3) above —

(a) (in the case of a policy of insurance) amounts paid under the policy by way of premiums, and

(b) (in the case of a contract for a deferred annuity) amounts paid under the contract, whether by way of premiums or as lump sum consideration,

do not constitute actual consideration.

(5) And for those purposes actual consideration for—

(a) a disposal which is made by one spouse [F10 or civil partner] to the other or is an approved post-marriage disposal [F11 or an approved post-civil partnership disposal], or

(b) a disposal to which section 171(1) applies,

is to be treated as not constituting actual consideration.

(6) For the purposes of subsection (5)(a) above a disposal is an approved post-marriage disposal [F12 or an approved post-civil partnership disposal] if—

(a) it is made in consequence of the dissolution or annulment of a marriage [F13 or civil partnership] by one person who was a party to the marriage [F13 or civil partnership] to the other,

(b) it is made with the approval, agreement or authority of a court (or other person or body) having jurisdiction under the law of any country or territory or pursuant to an order of such a court (or other person or body), and

(c) the rights disposed of were, or the interest disposed of was, held by the person by whom the disposal is made immediately before the marriage [F14 or civil partnership] was dissolved or annulled.

(7) Subsection (8) below applies for the purposes of tax on chargeable gains where—

(a) (if that subsection did not apply) a loss would accrue on a disposal of, or of an interest in, the rights conferred by the policy of insurance or contract for a deferred annuity, but

(b) if sections 37 and 39 were disregarded, there would accrue on the disposal a loss of a smaller amount, a gain or neither a loss nor a gain.

(8) If (disregarding those sections) a loss of a smaller amount would accrue, that smaller amount is to be taken to be the amount of the loss accruing on the disposal; and in any other case, neither a loss nor a gain is to be taken to accrue on the disposal.

(9) But subsection (8) above does not affect the treatment for the purposes of tax on chargeable gains of the person who acquired rights, or an interest in rights, on the disposal.

(10) The occasion of—

(a) the receipt of the sum or sums assured by the policy of insurance,

(b) the transfer of investments or other assets to the owner of the policy of insurance in accordance with the policy, or

(c) the surrender of the policy of insurance,

is for the purposes of tax on chargeable gains an occasion of a disposal of the rights (or of all of the interests in the rights) conferred by the policy of insurance.

(11) The occasion of—

(a) the receipt of the first instalment of the annuity under the contract for a deferred annuity, or

(b) the surrender of the rights conferred by the contract for a deferred annuity,

is for the purposes of tax on chargeable gains an occasion of a disposal of the rights (or of all of the interests in the rights) conferred by the contract for a deferred annuity.

(12) Where there is a disposal on the occasion of the receipt of the first instalment of the annuity under the contract for a deferred annuity—

(a) in the case of a disposal of the rights conferred by the contract, the consideration for the disposal is the aggregate of the amount or value of the first instalment and the market value at the time of the disposal of the right to receive the further instalments of the annuity, and

(b) in the case of a disposal of an interest in the rights, the consideration for the disposal is such proportion of that aggregate as is just and reasonable;

and no gain accruing on any subsequent disposal of, or of any interest in, the rights is a chargeable gain (even if subsection (3) above applies).

(13) In this section “interest”, in relation to rights conferred by a policy of insurance or contract for a deferred annuity, means an interest as a co-owner of the rights (whether the rights are owned jointly or in common and whether or not the interests of the co-owners are equal).]

Textual Amendments

F9 S. 210 substituted (with effect in accordance with s. 157(2) of the amending Act) by Finance Act 2003 (c. 14), s. 157(1)

F10 Words in s. 210(5)(a) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 116(2)(a)

F11 Words in s. 210(5)(a) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 116(2)(b)

F12 Words in s. 210(6) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 116(3)(a)

F13 Words in s. 210(6)(a) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 116(3)(b)

F14 Words in s. 210(6)(c) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 116(3)(c)

[F15 210A Ring-fencing of losses U.K.

(1) [F16 Section 2A(1)] has effect in relation to insurance companies subject to the provisions of this section.

[F17 (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 [F18 as permitted by subsection (2A)] (but are not otherwise allowable as a deduction from the BLAGAB chargeable gains accruing to the company).]

[F19 (2A) The following deductions may be made from the shareholders’ share of the BLAGAB chargeable gains accruing to the company in an accounting period—

(a) any available non-BLAGAB allowable losses accruing to the company in the period may be deducted under section 2A(1)(a), and

(b) after making any deductions within paragraph (a), any available non-BLAGAB allowable losses previously accruing to the company, which have not been allowed as a deduction from chargeable gains accruing in the period or in any previous accounting period, may (subject to section 269ZFC of CTA 2010) be deducted under section 2A(1)(b).

(2B) But those deductions may not reduce the shareholders’ share of BLAGAB chargeable gains below nil.

(2C) The amount of “available non-BLAGAB allowable losses” accruing to a company in an accounting period is the amount by which the non-BLAGAB allowable losses accruing to the company in the accounting period exceed the non-BLAGAB chargeable gains so accruing.]

(3) BLAGAB allowable losses accruing to an insurance company are allowable as a deduction from non-BLAGAB chargeable gains accruing to the company as permitted by the following provisions of this section (and not otherwise).

(4) They are allowable as a deduction from only so much of non-BLAGAB chargeable gains accruing to the company in an accounting period as exceeds the aggregate of—

(a) non-BLAGAB allowable losses accruing to the company in the accounting period, and

(b) non-BLAGAB allowable losses previously accruing to the company which have not been allowed as a deduction from chargeable gains accruing in any previous accounting period.

(5) And they are allowable as a deduction from non-BLAGAB chargeable gains accruing to the company in an accounting period only to the extent that they do not exceed the permitted amount for the accounting period.

(6) The permitted amount for the first accounting period of an insurance company in relation to which this section has effect is the aggregate of—

(a) the F20 ... shareholders' share for that accounting period of BLAGAB allowable losses accruing to the company in the accounting period F21 ..., and

(b) the shareholder’s share for the immediately preceding accounting period of BLAGAB allowable losses previously accruing to the company which have not been allowed as a deduction from chargeable gains accruing in that immediately preceding accounting period or any earlier accounting period.

(7) The permitted amount for any subsequent accounting period of the company is arrived at by—

(a) deducting from the permitted amount for the immediately preceding accounting period the amount of any BLAGAB allowable losses allowed as a deduction from non-BLAGAB chargeable gains accruing to the company in the immediately preceding accounting period, and

(b) adjusting the result in accordance with subsection (8) or (9) below.

(8) [F22 If there are] BLAGAB chargeable gains accruing to the company in the subsequent accounting period F23 ..., the amount arrived at under subsection (7)(a) above is reduced by a fraction of which—

(a) the denominator is the BLAGAB allowable losses accruing to the company in any previous accounting period which have not been allowed as a deduction from chargeable gains accruing to the company in any previous accounting period, and

(b) the numerator is so many of those allowable losses as are allowed as a deduction[F24 , under step 2 of section 75(1) of FA 2012,] from BLAGAB chargeable gains accruing to the company in the accounting period.

[F25 (9) If there are BLAGAB allowable losses accruing to the company in the subsequent accounting period, the amount arrived at under subsection (7)(a) is increased by the shareholders’ share of the amount of those allowable losses.]

[F26 (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) [F27 For the purposes of subsections (10A) and (10B)], 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).]

(11) In arriving at [F28 the shareholders' share] of chargeable gains accruing to an insurance company under [F29 subsections (10) to (10C)] above there is to be ignored—

(a) any deduction under section 202(9) (mineral leases: capital losses),

(b) any reduction under section 213(3) (spreading of losses from deemed disposal of holdings of unit trust etc), and

(c) any amount carried back under [F30 section 389(1) of CTA 2009] (non-trading deficit on loan relationships).

F31 (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13) In this section—

• “BLAGAB allowable losses”, in relation to an insurance company, means allowable losses referable[F32 , in accordance with Chapter 4 of Part 2 of the Finance Act 2012,] to the company’s basic life assurance and general annuity business, [F33 but excluding any allowable losses deducted under step 2 of section 75(1) of FA 2012 in determining the BLAGAB chargeable gains of the company for an accounting period,]

• “BLAGAB chargeable gains”, in relation to an insurance company, means chargeable gains [F34 (as adjusted for allowable losses in accordance with section 75 of FA 2012)] referable[F32 , in accordance with Chapter 4 of Part 2 of the Finance Act 2012,] to the company’s basic life assurance and general annuity business,

• “non-BLAGAB allowable losses”, in relation to an insurance company, means allowable losses of the company which are not BLAGAB allowable losses,

• “non-BLAGAB chargeable gains”, in relation to an insurance company, means chargeable gains of the company which are not BLAGAB chargeable gains, F35 ...

• F35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F15 S. 210A inserted (with effect in accordance with Sch. 33 para. 14(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 14(1)

F16 Words in s. 210A(1) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 71

F17 S. 210A(2) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 80(2)

F18 Words in s. 210A(2) inserted (with effect in relation to accounting periods beginning on or after 1.4.2020 of the amending Act) by Finance Act 2020 (c. 14), Sch. 4 paras. 12(2), 42 (with Sch. 4 paras. 43-46)

F19 S. 210A(2A)-(2C) inserted (with effect in relation to accounting periods beginning on or after 1.4.2020 of the amending Act) by Finance Act 2020 (c. 14), Sch. 4 paras. 12(3), 42 (with Sch. 4 paras. 43-46)

F20 Words in s. 210A(6)(a) omitted (with effect in relation to accounting periods beginning on or after 1.4.2020) by virtue of Finance Act 2020 (c. 14), Sch. 4 paras. 12(4)(a), 42 (with Sch. 4 paras. 43-46)

F21 Words in s. 210A(6)(a) omitted (with effect in relation to accounting periods beginning on or after 1.4.2020) by virtue of Finance Act 2020 (c. 14), Sch. 4 paras. 12(4)(b), 42 (with Sch. 4 paras. 43-46)

F22 Words in s. 210A(8) substituted (with effect in relation to accounting periods beginning on or after 1.4.2020 of the amending Act) by Finance Act 2020 (c. 14), Sch. 4 paras. 12(5)(a), 42 (with Sch. 4 paras. 43-46)

F23 Words in s. 210A(8) omitted (with effect in relation to accounting periods beginning on or after 1.4.2020) by virtue of Finance Act 2020 (c. 14), Sch. 4 paras. 12(5)(b), 42 (with Sch. 4 paras. 43-46)

F24 Words in s. 210A(8)(b) inserted (with effect in relation to accounting periods beginning on or after 1.4.2020) by Finance Act 2020 (c. 14), Sch. 4 paras. 12(6), 42 (with Sch. 4 paras. 43-46)

F25 S. 210A(9) substituted (with effect in relation to accounting periods beginning on or after 1.4.2020) by Finance Act 2020 (c. 14), Sch. 4 paras. 12(7), 42 (with Sch. 4 paras. 43-46)

F26 S. 210A(10)-(10C) substituted for s. 210A(10)(10A) (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 80(3)

F27 Words in s. 210A(10C) substituted (with effect in relation to accounting periods beginning on or after 1.4.2020) by Finance Act 2020 (c. 14), Sch. 4 paras. 40, 42 (with Sch. 4 paras. 43-46)

F28 Words in s. 210A(11) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 80(4)(a)

F29 Words in s. 210A(11) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 80(4)(b)

F30 Words in s. 210A(11)(c) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 379(3) (with Sch. 2 Pts. 1, 2)

F31 S. 210A(12) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 80(5)

F32 Words in s. 210A(13) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 80(6)(a)

F33 Words in s. 210A(13) inserted (with effect in relation to accounting periods beginning on or after 1.4.2020 of the amending Act) by Finance Act 2020 (c. 14), Sch. 4 paras. 12(8)(a), 42 (with Sch. 4 paras. 43-46)

F34 Words in s. 210A(13) inserted (with effect in accordance with Sch. 4 para. 42 of the amending Act) by Finance Act 2020 (c. 14), Sch. 4 para. 12(8)(b) (with Sch. 4 paras. 43-46)

F35 Words in s. 210A(13) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 80(6)(b)

Modifications etc. (not altering text)

C1 S. 210A modified by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), reg. 34A (as inserted by S.I. 2007/2134, regs. 1(1)(2), 27)

[F36 210B Disposal and acquisition of [F37 section 119 or 120 securities] U.K.

(1) Subsections (2) to (4) below apply in a case where, within a period of 10 days, an insurance company disposes of a number of [F38 section 119 or 120 securities] and (whether subsequently or previously) acquires a number of [F38 section 119 or 120 securities] if—

(a) the securities disposed of decrease the size of a [F39 chargeable section 119 or 120 holding],

(b) the securities acquired increase the size of the same [F39 chargeable section 119 or 120 holding], and

(c) (apart from this section) an allowable loss would accrue on the disposal.

(2) The securities disposed of shall be identified with the securities acquired.

(3) The securities disposed of shall be identified with securities acquired before the disposal rather than securities acquired after the disposal and—

(a) in the case of securities acquired before the disposal, with those acquired later rather than those acquired earlier, and

(b) in the case of securities acquired after the disposal, with those acquired earlier rather than those acquired later.

(4) Where securities acquired could be identified with securities disposed of either at an earlier or at a later date, they shall be identified with the former rather than the latter; and the identification of securities acquired with securities disposed of on any occasion shall preclude their identification with securities comprised in a later disposal.

(5) Subsections (2) to (4) above have effect subject to section 105(1).

(6) Subsections (2) to (4) above do not apply to—

(a) securities which are [F40 assets within section 212(1).] F41 ...

F41 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Subsections (2) to (4) above do not apply if—

(a) the securities disposed of are [F42 assets wholly matched to BLAGAB liabilities and the assets are] appropriated to a BLAGAB internal linked fund,

(b) the securities acquired are, on acquisition, appropriated to that or another internal linked fund, and

(c) the disposal and acquisition are made with a view to adjusting the value of the assets of that fund, or of those funds, in order to match its or their liabilities.

[F43 (8) In this section—

• “BLAGAB internal linked fund” means an internal linked fund all the assets appropriated to which are matched wholly to BLAGAB liabilities,

• “chargeable section 119 or 120 holding” means a holding which is a separate holding as a result of section 119(1)(a), (c) or (d) or section 120(1)(a), (c) or (d) of the Finance Act 2012 (and section 121(1) and (2) of that Act),

• “internal linked fund”, in relation to an insurance company, means an account—

  (a)

  to which assets matched to the company's life assurance liabilities are appropriated by the company, and

  (b)

  which may be divided into units the value of which is determined by the company by reference to the value of those assets, and

• “section 119 or 120 securities” means securities within the meaning of section 119 or 120 of the Finance Act 2012 (see section 121(6)).]]

Textual Amendments

F36 S. 210B inserted (with effect in accordance with Sch. 33 para. 15(2)(3) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 15(1)

F37 Words in s. 210B heading substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 81(5)

F38 Words in s. 210B(1) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 81(2)(a)

F39 Words in s. 210B(1)(a)(b) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 81(2)(b)

F40 Words in s. 210B(6)(a) substituted (with effect in accordance with Sch. 10 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 5(2)

F41 S. 210B(6)(b) and preceding word repealed (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 62(a), Sch. 27 Pt. 2(7) (with Sch. 7 Pt. 2)

F42 Words in s. 210B(7)(a) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 81(3)

F43 S. 210B(8) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 81(4)

Modifications etc. (not altering text)

C2 S. 210B modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 35

[F44 210C Losses on disposal of authorised investment fund assets to connected manager U.K.

(1) Section 18(3) does not apply in relation to a loss accruing on the disposal by an insurance company of authorised investment fund assets to the manager of the authorised investment fund.

(2) In this section—

• “authorised investment fund assets” means assets [F45 held by the company for the purposes of its long-term business that consist of][F46 —

  (a)

  rights under an authorised unit trust,

  (b)

  rights under an authorised contractual scheme which is a co-ownership scheme, or

  (c)

  shares in an open-ended investment company,]

• “the manager of the authorised investment fund” means—

  (a)

  in the case of an authorised unit trust, the person who is the manager of the unit trust scheme for the purposes of Chapter 3 of Part 17 of the Financial Services and Markets Act 2000, F47 ...

  (aa)

  [F48 in the case of an authorised contractual scheme which is a co-ownership scheme, means the person who is the operator of the scheme for the purposes of that Part, and]

  (b)

  in the case of an open-ended investment company, a director or other person having responsibility for the management of its scheme property, and

• “open-ended investment company” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.]

Textual Amendments

F44 S. 210C inserted (with effect in accordance with Sch. 10 para. 17(4) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 3

F45 Words in s. 210C(2) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 82

F46 Words in s. 210C(2) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2017 (S.I. 2017/1204), regs. 1(1), 7(a)

F47 Word in s. 210C(2) omitted (with effect in accordance with reg. 1(2) of the amending S.I.) by virtue of The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2017 (S.I. 2017/1204), regs. 1(1), 7(b)(i)

F48 Words in s. 210C(2) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2017 (S.I. 2017/1204), regs. 1(1), 7(b)(ii)

211 Transfers of business. U.K.

[F49 (1) This section applies where an insurance business transfer scheme has effect to transfer business which consists of the effecting or carrying out of contracts of long-term insurance from one person (“the transferor”) to another (“the transferee”).

F50 (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

[F51 (2) Where this section applies the transferor and the transferee are treated for the purposes of corporation tax on chargeable gains as if any assets included in the transfer which—

(a) immediately before they are acquired by the transferee, were assets [F52 held by the transferor for the purposes of its long-term business], and

(b) immediately after they are so acquired are assets [F53 held by the transferee for the purposes of its long-term business],

were acquired for a consideration of such amount as would secure that neither a gain nor a loss would accrue to the transferor on the disposal.

[F54 (2A) The reference in subsection (2) above to assets included in the transfer does not include [F55 assets which formed part of the long-term business fixed capital of the company in question].]

(3) Subsection (2) above is subject to section 212.]

F56 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F57 (4) Subsection (2) does not apply in relation to assets which are referable to the long-term business of the transferor if all the income of the transferor's long-term business is chargeable to corporation tax on income under section 35 of CTA 2009.]

Textual Amendments

F49 S. 211(1)(1A) substituted (with effect in accordance with art. 66(2) of the amending S.I.) for s. 211(1) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), arts. 1(2)(a), 66(1)

F50 S. 211(1A) repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 43 Pt. 3(12)

F51 S. 211(2)(3) substituted for s. 211(2)(2A) (with effect in accordance with Sch. 9 para. 17(1) of the amending Act) by Finance Act 2007 (c. 11), Sch. 9 para. 14(2)

F52 Words in s. 211(2)(a) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 83(2)(a)

F53 Words in s. 211(2)(b) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 83(2)(b)

F54 S. 211(2A) inserted (with effect in accordance with Sch. 10 para. 17(2)(3) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 2(4)

F55 Words in s. 211(2A) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 83(3)

F56 S. 211(3) repealed (with effect in accordance with Sch. 29 paras. 5(4), 30(5), Sch. 40 Pt. II(12) Note 10 of the amending Act) by Finance Act 2000 (c. 17), Sch. 29 para. 30(4), Sch. 40 Pt. II(12) (with Sch. 29 para. 46(5))

F57 S. 211(4) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 83(4)

Modifications etc. (not altering text)

C3 S. 211(1) modified (with effect in accordance with reg. 1 of the amending S.I.) by The Friendly Societies (Taxation of Transfers of Business) Regulations 1995 (S.I. 1995/171), regs. 1, 4(1)(2)(e)

[F58 211ZA Transfers of business: transfer of unused losses U.K.

(1) This section applies where—

(a) an insurance business transfer scheme has effect to transfer business consisting of or including basic life assurance and general annuity business from one person (“the transferor”) to another (“the transferee”) or more than one others (“the transferees”), and

(b) the transferor has relevant unused losses.

(2) For the purposes of subsection (1)(b) above the transferor has relevant unused losses if—

(a) BLAGAB allowable losses accrue to the transferor in the accounting period ending with the day of the transfer or have so accrued in any earlier accounting period, and

(b) they are not deducted from chargeable gains accruing to the transferor in that accounting period and have not been deducted from chargeable gains so accruing in any previous accounting period.

[F59 (2A) For the purposes of subsection (2) above, where there is no accounting period of the transferor ending with the day of the transfer—

(a) there is deemed to be such an accounting period,

(b) BLAGAB allowable losses which would have accrued to the transferor in that accounting period are deemed to have accrued to the transferor in that accounting period, and

(c) if those BLAGAB allowable losses would not have been deducted from chargeable gains accruing to the transferor in that accounting period, they are deemed to be relevant unused losses.]

(3) Subject as follows—

(a) for the purposes of ascertaining the transferor’s total profits for any accounting period [F60 ending] after that in which the transfer takes place, the relevant unused losses are deemed not to have accrued to the transferor, but

(b) (instead) they are treated as accruing to the transferee (in accordance with subsection (4) below).

(4) The losses treated as accruing to the transferee under subsection (3)(b) above shall be deemed to be BLAGAB allowable losses accruing to the transferee in the accounting period of the transferee in which the transfer takes place.

(5) But those losses are not allowable as a deduction from chargeable gains accruing before the transfer takes place.

(6) For the purposes of section 210A (ring-fencing of losses), the shareholders' share of those losses is to be taken to be the same proportion as would be the shareholders' share of them if they had remained losses of the transferor.

(7) If only part of the transferor’s basic life assurance and general annuity business is transferred, subsection (3) above applies as if the references to the relevant unused losses were to such part of the relevant unused losses as is appropriate.

(8) If the transfer is to more than one others, subsection (3)(b) above applies as if the reference to the relevant unused losses being treated as accruing to the transferee were to such part of the relevant unused losses as is appropriate being treated as accruing to each of the transferees.

(9) Any question arising as to the operation of subsection (7) or (8) above shall be determined [F61 in the same manner as an appeal, and both the transferor and the transferee shall be entitled to be a party to any proceedings].

(10) In this section “BLAGAB allowable losses” means allowable losses referable[F62 , in accordance with Chapter 4 of Part 2 of the Finance Act 2012,] to the transferor’s basic life assurance and general annuity business.]

Textual Amendments

F58 S. 211ZA inserted (with effect in accordance with Sch. 33 para. 21(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 21(1)

F59 S. 211ZA(2A) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 28(2)

F60 Word in s. 211ZA(3)(a) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 28(3)

F61 Words in s. 211ZA(9) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 180

F62 Words in s. 211ZA(10) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 84

Modifications etc. (not altering text)

C4 S. 211ZA modified (with effect in accordance with reg. 1(2) of the affecting S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 36

[F63 211A Gains of insurance company from venture capital investment partnership U.K.

Schedule 7AD to this Act has effect with respect to the gains of an insurance company from a venture capital investment partnership.]

Textual Amendments

F63 S. 211A inserted (24.7.2002) by Finance Act 2002 (c. 23), s. 85(1)

[F64 211B Transfers of assets to certain collective investment schemes U.K.

(1) Subsection (2) applies if—

(a) an asset of an insurance company is made subject to a collective investment scheme which is—

(i) an authorised contractual scheme which is a co-ownership scheme, or

(ii) a relevant offshore fund,

(b) that is wholly in exchange for the company being issued with units in the scheme, and

(c) the condition in subsection (3) is met.

(2) For the purposes of corporation tax on chargeable gains, the company is to be treated—

(a) as having disposed of the asset mentioned in subsection (1)(a) for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the company, and

(b) as having acquired the units mentioned in subsection (1)(b) for a consideration of the same amount.

(3) The condition is that—

(a) immediately before the asset mentioned in subsection (1)(a) is made subject to the scheme, the asset was an asset held by the company for the purposes of its long-term business within one of the long-term business categories, and

(b) immediately after the asset is made subject to the scheme, the units mentioned in subsection (1)(b) are assets held by the company for the purposes of its long-term business within the same category.

(4) For the purposes of subsection (3), a “long-term business category” is—

(a) if the company is a UK life insurance company, a long-term business category set out in section 116(2) of the Finance Act 2012 (subject to section 116(3)), or

(b) if the company is an overseas life insurance company, a UK long-term business category set out in section 117(2) of that Act (subject to section 117(3)).

(5) In subsection (1), “relevant offshore fund” [F65 means an offshore fund that is a transparent fund within the meaning given by regulation 11 of the Offshore Funds (Tax) Regulations 2009.]

F66 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

Textual Amendments

F64 S. 211B inserted (8.6.2013) by The Collective Investment Schemes (Tax Transparent Funds, Exchanges, Mergers and Schemes of Reconstruction) Regulations 2013 (S.I. 2013/1400), regs. 1(1), 4 (with reg. 1(2))

F65 Words in s. 211B(5) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2017 (S.I. 2017/1204), regs. 1(1), 8(a)

F66 S. 211B(6) omitted (with effect in accordance with reg. 1(2) of the amending S.I.) by virtue of The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2017 (S.I. 2017/1204), regs. 1(1), 8(b)

212 Annual deemed disposal of holdings of unit trusts etc. U.K.

(1) Where at the end of an accounting period the assets [F67 held by an insurance company for the purposes of its long-term business] include—

(a) rights under an authorised unit trust, or

(b) [F68 interests in an offshore fund F69 ... ][F70 , or

[F71 (ba) units in an authorised contractual scheme which is a co-ownership scheme, or]

(c) shares in a company [F72 which is, or is a member of, a UK REIT within the meaning of Part 12 of CTA 2010] (Real Estate Investment Trusts),] [F73 or,

(d) shares in a company which is, or is a member of, a QAHC within the meaning of Schedule 2 to the Finance Act 2022 (qualifying asset holding companies),]

then, subject to the following provisions of this section and to section 213, the company shall be deemed for the purposes of corporation tax on capital gains to have disposed of and immediately reacquired each of the assets concerned at its market value at that time.

F74 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F75 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77 (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F78 (7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F79 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F80 (9) This section applies to an overseas life insurance company as if references in subsection (1) to assets were to such of the assets concerned as are UK assets.

(10) Assets (whether situated in the United Kingdom or elsewhere) are “UK assets” if, in accordance with the provision made by or under Chapter 4 of Part 2 of CTA 2009, they fall to be attributed to the permanent establishment in the United Kingdom through which the company carries on life assurance business.]

Textual Amendments

F67 Words in s. 212(1) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 85(2)

F68 Words in s. 212(1)(b) substituted (with effect in accordance with art. 1(2)(3), Sch. 1 of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 127(3)(a)

F69 Words in s. 212(1)(b) omitted (8.6.2013) by virtue of The Collective Investment Schemes (Tax Transparent Funds, Exchanges, Mergers and Schemes of Reconstruction) Regulations 2013 (S.I. 2013/1400), regs. 1(1), 5(a) (with reg. 1(2))

F70 S. 212(1)(c) and preceding word inserted (19.7.2006) by Finance Act 2006 (c. 25), s. 137

F71 S. 212(1)(ba) inserted (8.6.2013) by The Collective Investment Schemes (Tax Transparent Funds, Exchanges, Mergers and Schemes of Reconstruction) Regulations 2013 (S.I. 2013/1400), regs. 1(1), 5(b) (with reg. 1(2))

F72 Words in s. 212(1)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 249 (with Sch. 2)

F73 S. 212(1)(d) and word inserted (24.2.2022) by Finance Act 2022 (c. 3), Sch. 2 para. 56(1)

F74 S. 212(2) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 85(3)

F75 S. 212(2A) repealed (with effect in accordance with Sch. 10 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 5(3)(a), Sch. 27 Pt. 2(10)

F76 S. 212(3)(4)(6) repealed (27.7.1993 with effect in relation to accounting periods beginning on or after 1.1.1993) by 1993 c. 34, ss. 91(2)(b), 213, Sch. 23 Pt. III Table(8) Note

F77 S. 212(5)-(7) repealed (with effect in accordance with art. 1(2)(3), Sch. 1 of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 127(3)(b), Sch. 2

F78 S. 212(7A) repealed (with effect in accordance with s. 39(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 8 para. 18, Sch. 27 Pt. 2(8) (with Sch. 8 Pt. 2)

F79 S. 212(8) repealed (27.7.1993 with effect as mentioned in s. 91(1)) by 1993 c. 34, ss. 91(1), 213, Sch. 23 Pt. III Table(8) Note

F80 S. 212(9)(10) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 85(4)

Modifications etc. (not altering text)

C5 S. 212 modified (31.7.1992) by S.I. 1992/1655, arts. 1, 21

S. 212 amended (27.7.1993) by 1993 c. 34, s. 91(1)

S. 212 excluded (27.7.1993) by 1993 c. 34, s. 91(1)

C6 S. 212 modified (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), s. 105, Sch. 15 para. 15(2)

C7 S. 212 modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 37 (as amended by S.I. 2007/2134, regs. 1(1)(2), 28)

C8 S. 212 modified (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Insurance Companies (Tax Exempt Business) Regulations 2007 (S.I. 2007/2145), regs. 1(1), 13

C9 S. 212 excluded by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 51(2) (as substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by S.I. 2008/3159, regs. 1(1), 15)

C10 S. 212 modified (with effect in accordance with reg. 2(2) of the amending S.I.) by The Insurance Companies and CFCs (Avoidance of Double Charge) Regulations 2012 (S.I. 2012/3044), regs. 1(1), 6

213 Spreading of gains and losses under section 212. U.K.

(1) Any chargeable gains or allowable losses which would otherwise accrue on disposals deemed by virtue of section 212 to have been made at the end of a company’s accounting period shall be treated as not accruing to it, but instead—

(a) there shall be ascertained the difference (“the net amount”) between the aggregate of those gains and the aggregate of those losses, and

(b) one-seventh of the net amount shall be treated as a chargeable gain or, where it represents an excess of losses over gains, as an allowable loss accruing to the company at the end of the accounting period, and

(c) a further one-seventh shall be treated as a chargeable gain or, as the case may be, as an allowable loss accruing at the end of each succeeding accounting period until the whole amount has been accounted for.

[F81 (1A) Subsection (1) above shall not apply to chargeable gains or allowable losses except so far as they are gains or losses which—

(a) are referable[F82 , in accordance with Chapter 4 of Part 2 of the Finance Act 2012,] to basic life assurance and general annuity business F83 ... ]

(2) For any accounting period of less than one year, the fraction of one-seventh referred to in subsection (1)(c) above shall be proportionately reduced; and where this subsection has had effect in relation to any accounting period before the last for which subsection (1)(c) above applies, the fraction treated as accruing at the end of that last accounting period shall also be adjusted appropriately.

(3) [F84 Subject to [F85 subsection (8H)] below,] Where—

(a) the net amount for an accounting period of an insurance company represents an excess of gains over losses,

(b) the net amount for [F86 either of the next 2] accounting periods (after taking account of any reductions made by virtue of this [F87 section]) represents an excess of losses over gains,

(c) there is (after taking account of any such reductions) no net amount for [F88 the intervening accounting period (if there is one)],

[F89 (ca) [F90 the intervening accounting period (if there is one) is not] an accounting period in which the company joined a group of companies, and]

(d) within 2 years after the end of the later accounting period the company makes a claim for the purpose in respect of the whole or part of the net amount for that period,

the net amounts for both the earlier and the later period shall be reduced by the amount in respect of which the claim is made.

F91 (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F92 (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Subject to subsection (5) below, where a company ceases to carry on [F93 long-term] business before the end of the last of the accounting periods for which subsection (1)(c) above would apply in relation to a net amount, the fraction of that amount that is treated as accruing at the end of the accounting period ending with the cessation shall be such as to secure that the whole of the net amount has been accounted for.

[F94 (4ZA) Subsection (4) applies in relation to an overseas life insurance company with the insertion after “long-term business” of the words “in the United Kingdom through a permanent establishment”.]

[F95 (4ZB) Subject to subsection (5) below, where a company—

(a) acquired units in a collective investment scheme where section 211B(2) applied in relation to that acquisition, and

(b) other than by virtue of section 212, disposes of some or all of those units during the period of three years after the end of the accounting period of the company in which the acquisition took place,

the fraction of any net amount that is treated as accruing at the end of the accounting period of the company in which the disposal occurs is to be adjusted so as to secure that the whole of the chargeable gain or allowable loss attributable to the units disposed of which has been taken into account in determining the net amount has been accounted for; and fractions of the net amount treated as accruing at the end of subsequent accounting periods are to be adjusted accordingly.

(4ZC) For the purposes of subsection (4ZB) (notwithstanding the provisions of Chapter 1 of Part 4 (shares, securities, options etc))—

[F96 (za) units in a collective investment scheme acquired as mentioned in subsection (4ZB)(a) at any time are treated as constituting a class of securities different from all other units in the scheme and from all other classes of securities arising as a result of this paragraph in respect of units acquired at different times,]

(a) units in a collective investment scheme acquired as mentioned in subsection (4ZB)(a) are treated as being disposed of before other units in the scheme or, where there are different classes of unit in the scheme, units of the same class held by the company, and

(b) where units are acquired as mentioned in subsection (4ZB)(a) at different times, units acquired at a later time are treated as disposed of before units acquired at an earlier time or, where there are different classes of unit in the scheme, units of the same class acquired at an earlier time.

F97 (4ZD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F97 (4ZE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

[F98 (4A) The following provisions apply where an insurance business transfer scheme has effect to transfer business which consists of the effecting or carrying out of contracts of long-term insurance from one person (“the transferor”) to another (“the transferee”).

(5) Subject to subsections (5A) to (7) below, any chargeable gain or allowable loss which ([F99 making the assumptions in subsection (5ZA) below]) would have accrued to the transferor by virtue of subsection (1) above after the transfer shall instead be deemed to accrue to the transferee.]

[F100 (5ZA) The assumptions referred to in subsection (5) above are—

(a) that the transferor had continued to carry on the business transferred after the transfer, and

(b) where there is no accounting period of the transferor ending with the day of the transfer, that for the purposes of section 212 and this section, there was such an accounting period.]

[F101 (5A) Subsection (5) above shall not apply where the transferee is resident outside the United Kingdom unless the business to which the transfer relates is carried on by the transferee, for a period beginning with the time when the transfer takes effect, through a [F102 permanent establishment] in the United Kingdom.]

(6) Where subsection (5) above has effect, the amount of the gain or loss accruing at the end of the first accounting period of the transferee ending after the day when the transfer takes place shall be calculated as if that accounting period began with the day after the transfer.

(7) Where the transfer is of part only of the transferor’s [F103 long-term] business, subsection (5) above shall apply only to such part of any amount to which it would otherwise apply as is appropriate.

(8) Any question arising as to the operation of subsection (7) above shall be determined [F104 in the same manner as an appeal, and both the transferor and the transferee shall be entitled to be a party to any proceedings].

[F105 (8A) Subsection (8B) below applies where—

F106 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the transferor and the transferee are, at the time of the transfer, members of the same group,

(c) the [F107 transferred assets] net amount for the accounting period of the transferor ending with the day of the transfer, or for the immediately preceding accounting period of the transferor, (“the relevant pre-transfer period of the transferor”) represents an excess of gains over losses,

(d) the [F107 transferred assets] net amount for the accounting period of the transferee in which the transfer takes place, or for the immediately following accounting period of the transferee, (“the relevant post-transfer period of the transferee”) represents an excess of losses over gains (after taking account of any reductions made by virtue of this section), and

(e) within 2 years after the end of the relevant post-transfer period of the transferee, the transferor and the transferee make a joint election in respect of the whole or part of the net amount for that period by notice to an officer of the Board.

(8B) Subject to subsections (8C) to (8E) and (8H) below, the [F108 transferred assets] net amounts for both the relevant pre-transfer period of the transferor and the relevant post-transfer period of the transferee shall be reduced by the amount in respect of which the election is made.

(8C) Subsection (8B) above does not apply if—

(a) the relevant post-transfer period of the transferee is the accounting period immediately following that in which the transfer takes place, and

(b) the relevant pre-transfer period of the transferor is the accounting period immediately preceding that ending with the day of the transfer.

(8D) If—

(a) the relevant post-transfer period of the transferee is the accounting period immediately following that in which the transfer takes place, and

(b) the relevant pre-transfer period of the transferor is the accounting period ending with the day of the transfer,

subsection (8B) above applies only if the conditions in subsection (8F) below are satisfied in relation to the accounting period of the transferee in which the transfer takes place.

(8E) If—

(a) the relevant post-transfer period of the transferee is the accounting period in which the transfer takes place, and

(b) the relevant pre-transfer period of the transferor is the accounting period immediately preceding that ending with the day of the transfer,

subsection (8B) above applies only if the conditions in subsection (8F) below are satisfied in relation to the accounting period of the transferor ending with the day of the transfer.

(8F) The conditions referred to in subsections (8D) and (8E) above are that—

(a) there is (after taking account of any reductions made by virtue of this section) no [F109 transferred assets] net amount for the accounting period, and

(b) the company whose accounting period it is did not join a group of companies in the accounting period.

(8G) A copy of the notice containing an election under subsection (8A)(e) above must accompany the tax return for the relevant post-transfer period of the transferee; and paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.

(8H) [F110 Subsection (3) above has] effect where the company, or the transferee, in question joins a group of companies in the accounting period for which the net amount represents an excess of losses over gains as if a claim or election could not be made in respect of that net amount except to the extent (if any) [F111 that the net amount would still arise even if losses accruing after the date on which the company or transferee joined the group of companies were disregarded].

[F112 (8HA) Subsections (8A) and (8B) above have effect where the company, or the transferee, in question joins a group of companies in the accounting period for which the transferred assets net amount represents an excess of losses over gains as if a claim or election could not be made in respect of that net amount except to the extent (if any) that the transferred assets net amount would still arise even if losses accruing after the date on which the company or transferee joined the group of companies were disregarded.]

(8I) References in this section to a company joining a group of companies are to be construed in accordance with [F113 section 184C as if those references were contained in that section; and in subsection (8A)(b) above “group” has the same meaning as in that section].]

[F114 (8J) “Transferred assets net amount” means a net amount ascertained in accordance with section 213(1)(a) but only in relation to those assets referred to in section 212(1) which are transferred by the insurance business transfer scheme from the transferor to the transferee.]

F115 (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F116 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F81 S. 213(1A) inserted (27.7.1993) by 1993 c. 37, s. 91(4)

F82 Words in s. 213(1A) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 86(2)

F83 Words in s. 213(1A) repealed (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 64, Sch. 27 Pt. 2(7) (with Sch. 7 Pt. 2)

F84 Words in s. 213(3) inserted (with effect in accordance with s. 137(6) of the amending Act) by Finance Act 1998 (c. 36), s. 137(3)(a)

F85 Words in s. 213(3) substituted (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(2)(a)

F86 Words in s. 213(3)(b) substituted (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(2)(b)

F87 Word in s. 213(3)(b) substituted (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(2)(b)

F88 Words in s. 213(3)(c) substituted (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(2)(c)

F89 S. 213(3)(ca) substituted for word at end of s. 213(3)(c) (with effect in accordance with s. 137(6) of the amending Act) by Finance Act 1998 (c. 36), s. 137(3)(b)

F90 Words in s. 213(3)(ca) substituted (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(2)(d)

F91 S. 213(3A) repealed (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(3), Sch. 43 Pt. 3(12)

F92 S. 213(3B) repealed (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(3), Sch. 43 Pt. 3(12)

F93 Word in s. 213(4) substituted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), arts. 1(2)(a), 73(2)(a)

F94 S. 213(4ZA) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 86(3)

F95 S. 213(4ZB)-(4ZE) inserted (8.6.2013) by The Collective Investment Schemes (Tax Transparent Funds, Exchanges, Mergers and Schemes of Reconstruction) Regulations 2013 (S.I. 2013/1400), regs. 1(1), 6 (with reg. 1(2))

F96 S. 213(4ZC)(za) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2017 (S.I. 2017/1204), regs. 1(1), 9(2)

F97 S. 213(4ZD)(4ZE) omitted (with effect in accordance with reg. 1(2) of the amending S.I.) by virtue of The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2017 (S.I. 2017/1204), regs. 1(1), 9(3)

F98 S. 213(4A)(5) substituted for s. 213(5) (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(4)

F99 Words in s. 213(5) substituted for the words "assuming that the transferor had continued to carry on the business transferred after the transfer" (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(2)

F100 S. 213(5ZA) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(3)

F101 S. 213(5A) inserted (with effect in accordance with s. 53(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 9 para. 4

F102 Words in s. 213(5A) substituted (with effect in accordance with s. 153(4) of the amending Act) by Finance Act 2003 (c. 14), s. 153(1)(b)

F103 Word in s. 213(7) substituted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), arts. 1(2)(a), 73(2)(a)

F104 Words in s. 213(8) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 181

F105 S. 213(8A)-(8I) inserted (with effect in accordance with Sch. 33 para. 16(6) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 16(5)

F106 S. 213(8A)(a) omitted (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(4)(a)

F107 Words in s. 213(8A)(c)(d) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(4)(b)

F108 Words in s. 213(8B) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(5)

F109 Words in s. 213(8F)(a) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(6)

F110 Words in s. 213(8H) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(7)

F111 Words in s. 213(8H) substituted (with effect in accordance with s. 70(5) of the amending Act) by Finance Act 2006 (c. 25), s. 70(5)(a) (with s. 70(10)-(11))

F112 S. 213(8HA) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(8)

F113 Words in s. 213(8I) substituted (with effect in accordance with s. 70(5) of the amending Act) by Finance Act 2006 (c. 25), s. 70(5)(b) (with s. 70(10)-(11))

F114 S. 213(8J) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(9)

F115 S. 213(9) repealed (27.7.1993 with effect in relation to accounting periods beginning on or after 1.1.1993) by 1993 c. 34, s. 213, Sch. 23 Pt. III Table(8) Note

F116 S. 213(10) omitted (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 29(10)

Modifications etc. (not altering text)

C11 S. 213 modified (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), s. 105, Sch. 15 para. 15(2)

C12 S. 213 modified (with effect in accordance with reg. 1 of the amending S.I.) by The Insurance Companies (Capital Redemption Business) (Modification of the Corporation Tax Acts) Regulations 1999 (S.I. 1999/498), regs. 1, 11(2)

C13 S. 213(1A) modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 38

C14 S. 213(5) modified (with effect in accordance with reg. 1 of the amending S.I.) by The Friendly Societies (Taxation of Transfers of Business) Regulations 1995 (S.I. 1995/171), regs. 1, 4(1)(2)(e)

[F117 213A Power to modify ss. 212 and 213 etc in case of CFCs that are offshore funds U.K.

(1) The Treasury may make regulations for the purpose mentioned in subsection (2) in any case where—

(a) an insurance company to which the I - E rules apply is deemed to make a disposal under section 212 of an interest in an offshore fund,

(b) the offshore fund is a CFC, and

(c) there is (or, but for the regulations, would be) a CFC charge on the insurance company referable to its relevant interest in the CFC for the accounting period in which the disposal is deemed to have been made.

(2) The regulations are to be made for the purpose of modifying the operation of—

(a) section 212 or 213,

(b) the CFC rules, or

(c) the I - E rules,

in relation to any accounting period of the insurance company so as to reduce the charge to tax.

(3) The regulations may—

(a) make different provision for different cases or circumstances, and

(b) contain incidental, supplementary, consequential, transitional, transitory or saving provision.

(4) The provision that may be made as a result of subsection (3)(b) includes provision modifying any other provision of the Corporation Tax Acts.

(5) In this section—

• “CFC” and “CFC charge” have the same meanings as in Part 9A of TIOPA 2010 (see section 371VA),

• “the CFC rules” means the rules contained in that Part, and

• “offshore fund” has the meaning given by section 355 of TIOPA 2010.]

Textual Amendments

F117 S. 213A inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 87

F118 214 Transitional provisions. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F118 S. 214 repealed (with effect in accordance with Sch. 10 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 5(3)(b), Sch. 27 Pt. 2(10)

F119 214A Further transitional provisions. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F119 S. 214A repealed (with effect in accordance with Sch. 10 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 5(3)(c), Sch. 27 Pt. 2(10)

F120 214B Modification of Act in relation to overseas life insurance companies. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F120 S. 214B repealed (with effect in accordance with reg. 1 of the amending S.I.) by The Overseas Life Insurance Companies Regulations 2006 (S.I. 2006/3271), reg. 1, Sch. Pt. 1

F121 214BA Interpretation U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F121 S. 214BA repealed (with effect in accordance with Sch. 10 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 14(5)(a), Sch. 27 Pt. 2(10)