Taxation of Chargeable Gains Act 1992 section 210C

Losses on disposal of authorised investment fund assets to connected manager

Section 210C provides an exception to the normal rule that prevents losses from being recognised on disposals between connected persons, specifically where an insurance company disposes of authorised investment fund assets to the fund's manager at a loss.

• Normally, when connected persons transact with each other and a loss arises, that loss cannot be used against other gains — but this section disapplies that restriction for insurance companies disposing of authorised investment fund assets to the fund manager.
• Authorised investment fund assets are assets held by the insurance company for its long-term business, comprising rights under an authorised unit trust, rights under an authorised contractual scheme that is a co-ownership scheme, or shares in an open-ended investment company.
• The fund manager is defined according to the type of fund: for a unit trust it is the scheme manager, for a co-ownership contractual scheme it is the operator, and for an open-ended investment company it is a director or other person responsible for managing its scheme property.
• An open-ended investment company is one incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.