Taxation of Chargeable Gains Act 1992 Schedule 11 paragraph 14

Devaluation of sterling: foreign insurance funds

Paragraph 14 provides an uplift to allowable acquisition costs for certain foreign securities held by Lloyd's underwriters and mutual marine insurers, to account for the 1967 devaluation of sterling.

• Allowable acquisition costs under section 38(1)(a) are increased by multiplying by seven-sixths (i.e. an uplift of approximately 16.67%) when computing chargeable gains on qualifying disposals.
• The relief applies to gains accruing to Lloyd's underwriting members and companies carrying on mutual marine protection and indemnity insurance business.
• The disposal must be of foreign securities that, on 18 November 1967 (the date of sterling's devaluation), formed part of a trust fund established outside the United Kingdom by the person making the disposal.
• The trust fund must have been funded from premiums received in the course of the person's business and must have been wholly or mainly used to meet liabilities arising in the overseas country or territory in respect of that business.

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