Corporation Tax Act 2009 section 636

Modifications of Chapter 5

Section 636 modifies the rules on continuity of treatment for derivative contract transfers within groups when insurance companies are involved, adding extra qualifying transactions and restricting relief where assets move between long-term business categories.

• The normal group continuity rules for derivative contracts (Chapter 5) are extended to cover insurance business transfer schemes and qualifying overseas transfers of long-term insurance business, in addition to ordinary intra-group transfers.
• For ordinary intra-group transfers, group continuity treatment is switched off where the derivative contract is moving into or out of a company's long-term insurance business (with overseas life insurers only considering UK assets).
• For insurance business transfer schemes and qualifying overseas transfers, group continuity treatment is switched off where the derivative contract changes from one applicable asset category to another as a result of the transfer.
• Applicable categories for UK life insurers are the long-term business categories or a category of assets not held for long-term business; for overseas life insurers, they are the UK long-term business categories, UK assets not held for long-term business, or non-UK assets.