Revenue Note for Guidance
This section, which is an anti-avoidance provision, addressed the transfer of assets in accounting periods ending on or before 31 December 2002,m into or out of the special investment fund of a life assurance company. Where a life assurance company transferred an asset into a special investment fund, there was a deemed disposal and reacquisition of the asset. This crystallised the gains or losses accruing on the asset before its transfer to the 20 per cent fund and, thereby, there was a liability to tax or an allowable loss at a rate equivalent to the standard rate of income tax. Where an asset was transferred out of the special investment fund into some other fund of the life assurance company, the gains or losses which accrued within the 20 per cent fund also crystallised and were charged or allowed at 20 per cent.
Relevant Date: Finance Act 2021