7.—(1) Any security which is the subject of a notional or assumed investment mentioned in paragraph 5(1)(a), (b) or (c) shall be treated as having been redeemed on the last date on which it could have been redeemed in accordance with the terms on which it was issued (“the redemption date”).
(2) The amount originally treated as invested in the security shall be assumed to have been re-invested on the redemption date in a government security designated by the Department after consulting the Government Actuary.
(3) The notional interest calculated in accordance with paragraph 5 shall be increased by any excess of F over E, or as the case may be reduced by any excess of
E over F,
where—
E is the amount originally treated as invested in the security; and
F is the amount notionally received on its redemption after deducting any capital gains tax that would have been payable if the investment had been held for the purposes of a retirement benefits scheme of the kind mentioned in paragraph 5(2).