PART 2

Insurance companies carrying on long-term business
CHAPTER 8

Assets held for purposes of long-term business

Transfers of assets from different categories

UK life insurance companies
116
1
If, at any time in a period of account of a UK life insurance company, an asset (or a part of an asset) held by the company—
a
ceases to be within one of the long-term business categories, and
b
comes within another of those categories,
the company is treated for the purposes of corporation tax on chargeable gains as if it had disposed of and immediately re-acquired the asset (or part) at that time for a consideration equal to the fair value of the asset (or part) at that time.
2
The long-term business categories in question are—
a
assets which are matched to BLAGAB liabilities of the company,
b
assets which are matched to other long-term business liabilities of the company,
c
assets which are held by the company for the purposes of any with-profits fund but which are not matched to its long-term business liabilities, and
d
assets which are held for the purposes of the company’s long-term business but which are not matched to its long-term business liabilities or held by it for the purposes of any with-profits funds.
3
If the company has more than one with-profits fund within subsection (2)(c), the assets which are held by it for the purposes of a particular fund but which are not matched to its long-term business liabilities are treated as assets within a separate long-term business category.
4
Subsection (1) does not apply if all the income of the company’s long-term business is chargeable to corporation tax on income under section 35 of CTA 2009.
5
If, at any time in a period of account of a UK life insurance company, an asset (or a part of an asset) held by the company—
a
ceases to be within a category set out in subsection (6), and
b
comes within the other category set out there,
the company is treated for the purposes of corporation tax as if it had disposed of and immediately re-acquired the asset (or part) for a consideration equal to the fair value of the asset (or part) at that time.
6
The categories in question are—
a
assets which are held for the purposes of the company’s long-term business, and
b
other assets.