Taxation of Chargeable Gains Act 1992 section 204

Policies of insurance

Section 204 sets out the capital gains tax treatment of non-life insurance policies, certain annuity contracts, and assets transferred to policyholders under life assurance policies.

• Gains from disposing of non-life insurance policies are generally exempt from capital gains tax, but the exemption does not apply where the policy covers damage, loss, or depreciation of chargeable assets
• Insurance proceeds received for damage to, or loss or depreciation of, assets can still be treated as sums derived from those assets, potentially triggering a charge under the capital sums rules
• Gains from disposing of rights under an annuity contract are exempt if the annuity is a non-deferred annuity or one granted under the Government Annuities Act 1929
• Where assets are transferred to a policyholder under a life assurance policy, both the acquisition and disposal are deemed to take place at market value