Corporation Tax Act 2009 section 187

Transfer of insurance business

Section 187 deals with what happens to the adjustment charge under sections 185 and 186 when an asset is transferred between insurance companies under an insurance business transfer scheme.

• When an insurance company transfers an asset subject to a section 185 or 186 adjustment to another insurance company under an insurance business transfer scheme, the asset is not treated as realised by the transferor merely because of the transfer.
• The transferee must be either UK resident or hold the asset for a business carried on in the UK through a permanent establishment immediately after the transfer.
• If the transferor's whole business is transferred, the transferee takes on responsibility for bringing into account any remaining amounts under section 185 or 186 after the transfer.
• This provision effectively postpones the adjustment charge, ensuring it arises only when the asset is ultimately realised by the transferee company rather than being triggered by the transfer itself.