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HMRC internal manual

Guidance on Real Estate Investment Trusts

From
HM Revenue & Customs
Updated
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Miscellaneous: insurance companies holding shares in a UK- REIT

Background

Section 212 TCGA applies to various kinds of assets held by an insurance company aspart of its long term insurance fund. This includes holdings in authorised investmentfunds and offshore funds. For the purposes of taxation of chargeable gains, the insurancecompany is deemed to have sold the assets and immediately reacquired them at market valueat the end of each accounting period. Section 213 TCGA then spreads the gains or lossesthat arise on the deemed disposals over seven years.

Annual deemed sale and reacquisition for TCGA purposes

Section 137 FA 2006 applies to shares in Real Estate Investment Trusts held by aninsurance company as part of its long term insurance fund. For the purposes of taxation ofchargeable gains, an insurance company is deemed to have sold the shares and immediatelyreacquired them at market value at the end of each accounting period.

For more information on the taxation of long term insurance funds of life companies, seethe Life Assurance Manual.