PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS

CHAPTER I PERSONAL RELIEFS

The reliefs

271 Deemed surrender in cases of certain loans.

M11

Where—

a

under section 547 a gain arising in connection with a policy F1. . . would be treated as forming part of an individual’s total income; and

b

the policy was issued in respect of an insurance made after 26th March 1974 F2. . .; and

c

any sum is at any time after the making of the insurance F1. . . lent to or at the direction of that individual by or by arrangement with the body issuing the policy F3. . .;

then, subject to subsection (2) below, the same results shall follow under sections 268 to 270 as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy F1. . . and the sum had been paid as consideration for the surrender (and if the policy is a qualifying policy, whether or not the premiums under it are eligible for relief under section 266, those results shall follow under section 269, whether or not a gain would be treated as arising on the surrender).

2

Subsection (1) above does not apply—

a

in relation to a policy if—

i

it is a qualifying policy; and

ii

either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence; F4. . .

F4b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .