Section 210B — Finance Act 2003: Disposal and acquisition of section 440A securities

Disposal and acquisition of section 440A securities 210B 1 Subsections (2) to (4) below apply in a case where, within a period of 10 days, an insurance company disposes of a number of section 440A securities and (whether subsequently or previously) acquires a number of section 440A securities if—

a the securities disposed of decrease the size of a chargeable section 440A holding, b the securities acquired increase the size of the same chargeable section 440A holding, and c (apart from this section) an allowable loss would accrue on the disposal.

2 The securities disposed of shall be identified with the securities acquired.

3 The securities disposed of shall be identified with securities acquired before the disposal rather than securities acquired after the disposal and—

a in the case of securities acquired before the disposal, with those acquired later rather than those acquired earlier, and b in the case of securities acquired after the disposal, with those acquired earlier rather than those acquired later.

4 Where securities acquired could be identified with securities disposed of either at an earlier or at a later date, they shall be identified with the former rather than the latter; and the identification of securities acquired with securities disposed of on any occasion shall preclude their identification with securities comprised in a later disposal.

5 Subsections (2) to (4) above have effect subject to section 105(1).

6 Subsections (2) to (4) above do not apply to—

a securities which are section 212 assets within the meaning of section 214(1) (rights under authorised unit trusts and interests in offshore funds), or b securities deemed by section 440 of the Taxes Act to be disposed of and immediately re-acquired by virtue of paragraph 3 of Schedule 19AA to the Taxes Act (assets becoming or ceasing to be assets of overseas life assurance fund).

7 Subsections (2) to (4) above do not apply if—

a the securities disposed of are linked assets appropriated to a BLAGAB internal linked fund, b the securities acquired are, on acquisition, appropriated to that or another internal linked fund, and c the disposal and acquisition are made with a view to adjusting the value of the assets of that fund, or of those funds, in order to match its or their liabilities.

8 In this section— “ BLAGAB internal linked fund ” means an internal linked fund all the assets appropriated to which are linked solely to basic life assurance and general annuity business, “ chargeable section 440A holding ” means a holding which is a separate holding by virtue of subsection (2)(a)(iii) or (d) of section 440A of the Taxes Act (and subsections (3) and (4) of that section), “ internal linked fund ” has the same meaning as in section 432ZA of the Taxes Act, and “ section 440A securities ” means securities within the meaning of section 440A of the Taxes Act.