Taxation of Chargeable Gains Act 1992 Schedule 7AD paragraph 8

Exclusion of negligible value claim

Paragraph 8 of Schedule 7AD prevents insurance companies from making negligible value claims in respect of a single asset held through a venture capital investment partnership.

• Normally, where an asset becomes virtually worthless, a taxpayer can claim under section 24(2) that the asset is treated as sold and immediately reacquired at its negligible value, crystallising a loss.
• This paragraph removes the ability to make such a negligible value claim in respect of the "single asset" — the notional single asset representing the insurance company's interest in a venture capital investment partnership.
• The restriction ensures that gains and losses arising through venture capital investment partnerships are dealt with under the specific rules in Schedule 7AD rather than through the general negligible value provisions.
• Insurance companies must instead account for any decline in the value of their partnership interest through other applicable provisions within the schedule.