Taxes Consolidation Act 1997 section 719

Deemed disposal and reacquisition of certain assets

Section 719 provides that the assets of a life assurance company's life business fund are deemed to be disposed of and reacquired at market value at the end of each accounting period, with the resulting net gain or loss spread over seven years under section 720.

• Each asset of the life business fund is deemed to be disposed of and immediately reacquired at market value on the last day of each accounting period, but this does not apply to Irish government securities (unless held under a swap arrangement), strips, pension business assets, or foreign life assurance fund assets.
• For assets not linked solely to core life assurance business, the deemed disposal applies only to the "relevant chargeable fraction" for the accounting period, calculated by reference to the company's liabilities and investment reserves across its different classes of business.
• The relevant chargeable fraction is computed differently for linked assets and non-linked assets, with the numerator in each case reflecting liabilities of business not charged to tax under Schedule D Case I or Case IV.
• To prevent overcharging on repeated part disposals, assets not linked solely to core life assurance business are deemed to have been acquired at market value on the day before the accounting period began.