Section 211ZA: Transfers of business: transfer of unused losses, Taxation of Chargeable Gains Act 1992

This section applies where—

an insurance business transfer scheme has effect to transfer business consisting of or including basic life assurance and general annuity business from one person ("the transferor") to another ("the transferee") or more than one others ("the transferees"), and

the transferor has relevant unused losses.

For the purposes of subsection (1)(b) above the transferor has relevant unused losses if—

BLAGAB allowable losses accrue to the transferor in the accounting period ending with the day of the transfer or have so accrued in any earlier accounting period, and

they are not deducted from chargeable gains accruing to the transferor in that accounting period and have not been deducted from chargeable gains so accruing in any previous accounting period.

For the purposes of subsection (2) above, where there is no accounting period of the transferor ending with the day of the transfer—

there is deemed to be such an accounting period,

BLAGAB allowable losses which would have accrued to the transferor in that accounting period are deemed to have accrued to the transferor in that accounting period, and

if those BLAGAB allowable losses would not have been deducted from chargeable gains accruing to the transferor in that accounting period, they are deemed to be relevant unused losses.

Subject as follows—

for the purposes of ascertaining the transferor's total profits for any accounting period ending after that in which the transfer takes place, the relevant unused losses are deemed not to have accrued to the transferor, but

(instead) they are treated as accruing to the transferee (in accordance with subsection (4) below).

The losses treated as accruing to the transferee under subsection (3)(b) above shall be deemed to be BLAGAB allowable losses accruing to the transferee in the accounting period of the transferee in which the transfer takes place.

But those losses are not allowable as a deduction from chargeable gains accruing before the transfer takes place.

For the purposes of section 210A (ring-fencing of losses), the shareholders' share of those losses is to be taken to be the same proportion as would be the shareholders' share of them if they had remained losses of the transferor.

If only part of the transferor's basic life assurance and general annuity business is transferred, subsection (3) above applies as if the references to the relevant unused losses were to such part of the relevant unused losses as is appropriate.

If the transfer is to more than one others, subsection (3)(b) above applies as if the reference to the relevant unused losses being treated as accruing to the transferee were to such part of the relevant unused losses as is appropriate being treated as accruing to each of the transferees.

Any question arising as to the operation of subsection (7) or (8) above shall be determined in the same manner as an appeal, and both the transferor and the transferee shall be entitled to be a party to any proceedings.

In this section "BLAGAB allowable losses" means allowable losses referable, in accordance with Chapter 4 of Part 2 of the Finance Act 2012, to the transferor's basic life assurance and general annuity business.

Section 211ZA: Transfers of business: transfer of unused losses

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