Commentary

D7.5157 Assets, losses and other reliefs of the long-term fund

Corporate tax
Corporate tax | Commentary

D7.5157 Assets, losses and other reliefs of the long-term fund

Corporate tax | Commentary

D7.5157 Assets, losses and other reliefs of the long-term fund

The rules in this division apply for accounting periods beginning before 1 January 2013. For accounting periods beginning on or after 1 January 2013 see Division D7.4.

One of the over-arching principles in the legislation is that assets that move from the long-term fund of the transferor should, with limited exceptions, do so on a basis that gives rise to neither a chargeable gain nor an allowable loss1. For periods of account beginning on or after 1 January 2007 there will be neither a chargeable gain nor an allowable loss on any assets subject to the CGT regime (but not structural assets, see D7.511, D7.5101) that transfer from the long-term insurance fund of one party to that of the other unless they are within TCGA 1992, s 212 which takes priority2.

This relief does not extend to assets held outside the long-term fund although in a group situation the relief provided by TCGA 1992, s 171 will remain available for assets moving from the shareholders' fund of the transferor to the equivalent fund in the transferee.

Notwithstanding the general extension of the no gain/no loss provisions to assets transferred, the relief does not apply to deemed disposals on a change of category under ICTA 1988, s 440 (see D7.550). Where an asset is transferred under an insurance business transfer scheme and is in a different category before and after the transfer, the transferor is deemed to have disposed of the asset

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