[GIM9160] Mutual insurance: change of status to non-mutual: transitional issues
Where a company ceases to be a mutual general insurer, its underwriting profits for subsequent accounting periods are brought into as trading income as described in GIM4000+ and GIM5000+. But there are some transitional issues.
Unless assets on which a chargeable gains would arise (such as shares and land) are disposed of and reacquired before the end of the mutual period, gains which accrued but were not realised during the period of mutuality would be included within trading receipts when the asset is disposed of. TCGA92/S161 does not apply in this situation as the assets are trading stock within the meaning of TCGA92/S288 both before and after the transfer.