Taxation of Chargeable Gains Act 1992 section 171C

Elections under section 171A: insurance companies

Section 171C makes special provision for group gain or loss reallocation elections under section 171A where one of the companies involved is an insurance company.

• When an insurance company (Company B) receives a reallocated gain or loss under a section 171A election, the normal restriction preventing intra-group no-gain no-loss treatment for insurance company long-term business assets is set aside, making the election possible.
• This relaxation does not apply where Company A (the company in which the gain or loss originally arose) is itself an insurance company and the asset was held for the purposes of its long-term business immediately before the disposal that gave rise to the gain or loss.
• Any gain or loss reallocated to an insurance company under the election is classified as a non-BLAGAB gain or loss for the purposes of the ring-fencing rules in section 210A, meaning it falls outside the basic life assurance and general annuity business category.
• These rules apply to chargeable gains and allowable losses accruing on or after 12 July 2009, following the introduction of the revised sections 171A to 171C by the Finance Act 2009.