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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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FA2010: risk transfer schemes: summary of the legislation

Risk Transfer Schemes

The ‘risk transfer scheme’ provisions are at CTA10/S937A to S937O.

The effect of the legislation is that where a company is party to a risk transfer scheme, certain losses are ‘ring-fenced’ for tax purposes and can only be relieved to the extent that there are profits from the same risk transfer scheme.

The key elements of the legislation are:

  • CTA10/S937C - the identification of a ‘risk transfer scheme’ (CFM63340 and CFM63350)
  • CTA10/S937E - the identification of ‘scheme profits’ and ‘scheme losses’ (CFM63360)
  • CTA10/S937F - the identification of ‘ring-fenced scheme losses’ and ‘relevant scheme profits’ (CFM63370 and CFM63380)
  • CTA10/S937G to S937I - the treatment of ‘ring-fenced scheme losses’ (CFM63390 to CFM63420)