Taxes Consolidation Act 1997 section 841

Voluntary Health Insurance Board: restriction of certain losses and deemed disposal of certain assets

Section 841 deals with the transitional provisions arising from the removal of the corporation tax exemption from the Voluntary Health Insurance Board (VHI) with effect from 1 March 1997.

• From 1 March 1997, the VHI is no longer exempt from corporation tax and is chargeable in the same way as any other insurance undertaking.
• Losses incurred by the VHI in accounting periods ending before 1 March 1997 cannot be carried forward for set-off against profits of later periods.
• Bonds and shares held by the VHI on 28 February 1997 as part of its health insurance business are deemed to have been disposed of and immediately reacquired at market value on that date.
• The deemed disposal and reacquisition ensures that unrealised gains which arose while the VHI was exempt from tax are not brought into charge on a later actual disposal of the investments.