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

Transfers of business and transfers within a group
118
1
If—
a
as a result of an insurance business transfer scheme transferring long-term business, a UK life insurance company or an overseas life insurance company acquires an asset, and
b
the asset (or part of it) is within one of the applicable categories at the time immediately before the acquisition but is not within that category immediately after that time,
the transferor 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 the time immediately before the acquisition.
2
The consideration for this deemed disposal and re-acquisition is equal to the fair value of the asset (or part) at that time.
3
If the transferor or the transferee is an overseas life insurance company, an asset (or part of an asset) is taken as being in the same category immediately before and after the acquisition if the asset (or part)—
a
was within one category immediately before the acquisition, and
b
was within a corresponding category immediately after the acquisition.
4
Subsections (1) to (3) do not apply if all the income of the long-term business of either the transferor or the transferee is chargeable to corporation tax on income under section 35 of CTA 2009.
5
For the purposes of subsections (1) to (3) “the applicable categories” means—
a
in the case of a UK life insurance company, the long-term business categories or a category of assets which are not held for the purposes of its long-term business, and
b
in the case of an overseas life insurance company, the UK long-term business categories, a category of UK assets which are not held for the purposes of its long-term business or a category of assets which are held by it but which are not UK assets.
6
If—
a
a UK life insurance company or an overseas life insurance company disposes of or acquires an asset (or part of an asset),
b
immediately before or after doing so, the asset (or part) is within the applicable category, and
c
section 171 or 173 of TCGA 1992 (transfers within a group) would, but for this subsection, apply to the disposal or acquisition,
that section does not apply to the disposal or acquisition.
7
For the purposes of subsection (6) “the applicable category” means—
a
in the case of a UK life insurance company, the category of assets which are held for the purposes of its long-term business, and
b
in the case of an overseas life insurance company, the category of UK assets which are held for the purposes of its long-term business.