PART 2Insurance companies carrying on long-term business

CHAPTER 10Transfers of long-term business

Transfers of long-term business: anti-avoidance

132Anti-avoidance

1

This section applies if—

a

under an insurance business transfer scheme, there is a transfer on or after 1 January 2013 from one insurance company to another of basic life assurance and general annuity business (or any part of that business) or non-BLAGAB long-term business (or any part of that business), and

b

the main purpose, or one of the main purposes, of a company (“C”) in entering into one or more of the arrangements included in the insurance business transfer arrangements is an unallowable purpose.

2

The “insurance business transfer arrangements” consist of—

a

the insurance business transfer scheme under which the transfer is made, and

b

any arrangement entered into on or after 1 January 2013 with a connection (direct or indirect) to that scheme.

3

A purpose is an “unallowable purpose” if—

a

it consists of securing a tax advantage for C or any other company, or

b

it is not amongst C’s business or other commercial purposes.

4

There are to be made such adjustments of any income or gains chargeable to corporation tax as are required to negate any tax advantage arising to C or any other company so far as referable to the unallowable purpose on a just and reasonable apportionment.

5

For the purposes of this section—

a

“arrangement” includes any agreement, scheme, transaction or understanding (whether or not legally enforceable), and

b

section 1139 of CTA 2010 (meaning of “tax advantage”) applies, but reading references to tax as references to corporation tax.

6

If C is not within the charge to corporation tax in respect of a part of its activities, C’s business or other commercial purposes for the purposes of this section do not include the purposes of that part of its activities.