Taxation of Chargeable Gains Act 1992 section 212

Annual deemed disposal of holdings of unit trusts etc.

Section 212 requires insurance companies to treat certain collective investment holdings as sold and reacquired at market value at the end of each accounting period, creating chargeable gains or losses for corporation tax purposes.

• Insurance companies holding unit trust rights, offshore fund interests, co-ownership scheme units, UK REIT shares, or qualifying asset holding company shares in their long-term business must apply an annual deemed disposal at market value
• The deemed disposal and immediate reacquisition takes place at the end of each accounting period, crystallising any gains or losses for corporation tax on capital gains
• Gains and losses arising from the deemed disposal may be spread over several years under the provisions of section 213
• Overseas life insurance companies are only subject to this rule in respect of UK assets, meaning those attributed to their UK permanent establishment