Taxation of Chargeable Gains Act 1992 section 210B

Disposal and acquisition of section 119 or 120 securities

Section 210B introduces a "bed and breakfast" anti-avoidance rule that prevents insurance companies from selling and rebuying the same type of securities within a 10-day window in order to crystallise an artificial allowable loss for capital gains tax purposes.

• Where an insurance company disposes of and reacquires section 119 or 120 securities within 10 days, and the disposal would otherwise produce an allowable loss, the securities sold must be matched (identified) with the securities bought, effectively neutralising the loss.
• Detailed identification rules determine which securities sold are matched with which securities bought: acquisitions before the disposal take priority over those after, and within each group the matching follows a nearest-in-time principle.
• The matching rules do not apply to securities that are assets subject to the annual deemed disposal regime under section 212(1), nor where the transactions involve BLAGAB internal linked fund assets being adjusted to match fund liabilities.
• Key defined terms include "section 119 or 120 securities" (securities as defined in sections 119 and 120 of the Finance Act 2012), "chargeable section 119 or 120 holding" (a separate holding created under those provisions), and "BLAGAB internal linked fund" (an internal linked fund whose assets are wholly matched to BLAGAB liabilities).