The Insurance Companies and CFCs (Avoidance of Double Charge) Regulations 2012

Modification of section 212 of the Taxation of Chargeable Gains Act 1992

6.—(1) For the purposes of section 212 of the Taxation of Chargeable Gains Act 1992 the market value at the time of the deemed disposal under that section is adjusted as follows.

(2) The market value is treated as reduced by the total chargeable profits of the principal CFC and any associated CFC in any qualifying accounting period in so far as those profits are apportioned to the insurance company under the CFC rules and give rise to a CFC charge.

(3) But if the insurance company has received a distribution from the principal CFC or any associated CFC in any accounting period in which the disposal is deemed to have been made, the market value at the time of the deemed disposal is adjusted on a just and reasonable basis having regard to all the circumstances.

(4) For the purposes of paragraph (2), a “qualifying accounting period” is an accounting period of the principal CFC and any associated CFC which ends in an accounting period of the company in which a disposal of the company’s interest in the principal CFC is deemed to have been made under section 212.

(5) In this regulation, “accounting period” and “chargeable profits”, in relation to a CFC, have the same meanings as in Part 9A of TIOPA 2010 (see section 371VA of that Act).