Taxation of Chargeable Gains Act 1992 section 213

Spreading of gains and losses under section 212

Section 213 provides a mechanism for insurance companies to spread the chargeable gains and allowable losses arising from the annual deemed disposal of unit trust holdings (under section 212) over seven accounting periods, rather than recognising them all at once.

• The net amount (gains minus losses, or vice versa) from section 212 deemed disposals is spread in equal sevenths over seven successive accounting periods, with proportionate reduction for short periods
• An insurance company with a net gain in one period and a net loss in either of the next two periods may claim to offset the loss against the earlier gain, reducing both net amounts accordingly
• On a transfer of long-term insurance business, any outstanding spreading amounts pass from the transferor to the transferee, with special rules for partial transfers, group transfers, and overseas transferees
• Anti-avoidance restrictions limit the ability to offset losses where a company has recently joined a group, ensuring that only pre-joining losses can be used in a claim or election