11 August 2014
The facility to transfer a book of business between two EEA insurers when one of them is regulated by the UK has been extended to Gibraltar. This facility is governed by the courts under provisions in Part VII of the Financial Services and Markets Act 2000 (FSMA). Such a transfer is usually accepted by HMRC as eligible for VAT free treatment as a transfer of a business as a going concern (TOGC) – an important relief if the transfer is to a UK based insurer or reinsurer. Other conditions must be met to ensure that the relief applies. On the other hand transfers to a Gibraltar insurer or reinsurer should not give rise to any additional UK VAT issues, and Gibraltar has no VAT system.