GIM5210 - Taxation of the investment return: investment gains: periods of account beginning on or after 1 January 2002: transition from realisations basis: transfers of business

FA02/S64 to FA02/66 and FA02/SCH22 are relieving provisions and continue to be available where there is a transfer of general insurance business under section 105 FSMA 2000 (see GIM4220), or a similar transfer authorised in another EU or EEA member state (FA02/SCH22/PARA10).

Where an election has been made under section FA 2002 to continue the realisation basis for assets acquired before 2002, the assets retain that status if they are transferred to another company in accordance with a Part 7 FSMA (or equivalent overseas) business transfer scheme.

In these cases the asset is not treated as having been realised by the transferor, and the transferee is required to bring any amounts deferred under paragraphs 8 and 9 into account.

This only applies where the transferee is within the charge to corporation tax in respect of the assets, i.e. is UK resident, or trading in the UK through a permanent establishment in circumstances such that the assets transferred are attributable to the branch.