Regulation 22 Insertion of regulations 7A and 7B

After regulation 7 insert—

“7A

(1)

An asset shall be deemed to have been disposed of by an insurance company immediately before its first accounting period to begin on or after 1st October 2002 where—

(a)

the asset was a regulation 7 asset at the time of its deemed disposal, and

(b)

at that time, the insurance company had made no election under regulation 8A of these Regulations.

(2)

Subject to regulation 7B, any chargeable gain or allowable loss accruing on the deemed disposal under paragraph (1) above of an asset shall be brought into account as if it had accrued immediately after the end of the final accounting period.

7B.

In any case where, apart from this regulation, chargeable gains or allowable losses would accrue to an insurance company immediately after the end of the final accounting period by virtue of regulation 7A—

(a)

the insurance company may elect, by notice to the inspector within two years of the end of the final accounting period, that this regulation shall apply as respects all such gains or losses, and

(b)

where such an election is made, every such gain or loss to which this regulation applies shall be treated as accruing only when the asset or liability to which the gain or loss relates ceases to be held or owed by the insurance company.”.