Taxation of Chargeable Gains Act 1992 section Sch 5AAA para 10

Units in CIVs held by life insurance companies

Section Sch 5AAA paragraph 10 provides that where an offshore collective investment vehicle has elected to be treated as a partnership, that election is disregarded in respect of units held by life insurance companies for the purposes of their long-term business.

• This provision applies where an offshore collective investment vehicle (CIV) has made an election under paragraph 8 to be treated as a partnership for capital gains purposes.
• The partnership election is treated as having no effect in relation to any units in the vehicle held by an insurance company for its long-term business.
• The practical result is that life insurance companies holding units in an elected CIV continue to be taxed on a normal collective investment scheme basis rather than on a transparent partnership basis.
• This carve-out recognises that long-term insurance business is subject to its own specific tax regime and the partnership treatment would be inappropriate for such holdings.