Taxation of Chargeable Gains Act 1992 section 211

Transfers of business

Section 211 deals with the capital gains tax treatment of assets transferred as part of an insurance business transfer scheme involving long-term insurance contracts, ensuring that such transfers are generally tax-neutral for the transferor.

• When long-term insurance business is transferred from one party (the transferor) to another (the transferee) under an insurance business transfer scheme, the assets are treated as acquired at a price that produces no chargeable gain or loss for the transferor.
• This no-gain, no-loss treatment only applies where the assets were held for long-term business purposes by the transferor immediately before the transfer and continue to be held for long-term business purposes by the transferee immediately afterwards.
• Assets forming part of the transferor's long-term business fixed capital are excluded from this treatment, and the no-gain, no-loss rule is also subject to the provisions of section 212 concerning annual deemed disposals of holdings of unit trusts and similar investments.
• The no-gain, no-loss treatment does not apply at all where the entirety of the transferor's long-term business income is already chargeable to corporation tax on income under section 35 of the Corporation Tax Act 2009.