Modifications etc. (not altering text)
C1Pt. 13 Ch. 2 restricted (with effect in accordance with s. 105(1) of the affecting Act) by Finance Act 1996 (c. 8), Sch. 13 para. 3(2) (with Sch. 13 para. 16)
C2Pt. 13 Ch. 2 applied (with modifications) (6.4.1999) by The Individual Savings Account Regulations 1998 (S.I. 1998/1870), regs. 35(7), 36(3)-(7) (as amended by The Individual Savings Account (Amendment) Regulations 1998 (S.I. 1998/3174), reg. 12)
C3Pt. 13 Ch. 2 applied (with modifications) (6.4.1999 with effect in accordance with reg. 1 of the affecting S.I.) by The Personal Portfolio Bonds (Tax) Regulations 1999 (S.I. 1999/1029), reg. 6(2)-(8) (as amended (6.4.2002) by The Personal Portfolio Bonds (Tax) (Amendment) Regulations 2002 (S.I. 2002/455), regs. 1, 2)
C4Pt. 13 Ch. 2 modified (9.4.2003) by Finance Act 2003 (c. 14), s. 171(1)(3), Sch. 34 para. 3
C5Pt. 13 Ch. 2 modified (9.4.2003) by Finance Act 2003 (c. 14), s. 171(1)(3), Sch. 34 para. 15
M1(1)On the happening of a chargeable event in relation to any contract for a life annuity, there shall be treated as a gain arising in connection with the contract—
(a)if the event is the surrender in whole of the rights conferred by the contract, the excess (if any) of the amount payable by reason of the event plus the amount or value of any relevant capital payments over the sum of the following—
(i)the total amount previously paid under the contract, whether by way of premiums or as lump sum consideration, reduced, if before the happening of the event one or more payments have been made on account of the annuity, by the capital element in that payment or payments, as determined in accordance with section 656; and
(ii)the total amount treated as a gain by virtue of paragraph (c) below [F1or section 546C(7)(b)] on the previous happening of chargeable events;
(b)if the event is an assignment, the excess (if any) of the amount or value of the consideration, plus the amount or value of any relevant capital payments or [F2, subject to subsection (2A) below,] of any previously assigned share in the rights conferred by the contract, over the sum of the following—
(i)the amount specified paragraph (a)(i) above; and
(ii)any amount treated as a gain by virtue of paragraph (c) below [F1or section 546C(7)(b)] on the previous happenings of chargeable events;
(c)if the event is the occurrence of such an excess as is mentioned in section 542(1), the amount of the excess [F3(subject to section 546B(3)(a))].
(2)Subsection (3) of section 541 shall apply for the purposes of subsection (1) above as it applies for the purposes of subsection (1)(c) of that section, and subsection (4) of that section shall apply for the purposes of this section with the substitution of references to the contract for references to the policy.
[F4(2A)The amount or value of such a previously assigned share as is mentioned in paragraph (b) of subsection (1) above falls to be brought into account for the purposes of that paragraph only where that share was so assigned—
(a)in a year (as defined in section 546(4)) beginning on or before 5th April 2001; or
(b)for money or money’s worth in a year (as so defined) beginning on or after 6th April 2001.]
(3)In this section “relevant capital payments” means, in relation to any contract, any sum or other benefit of a capital nature paid or conferred under the contract before the happening of the chargeable event.
Textual Amendments
F1Words in s. 543(1)(a)(ii)(b)(ii) inserted (with effect in accordance with s. 83(2) of the amending Act) by Finance Act 2001 (c. 9), Sch. 28 para. 6(2)
F2Words in s. 543(1)(b) inserted (with effect in accordance with s. 87(11) of the amending Act) by Finance Act 2002 (c. 23), s. 87(6)
F3Words in s. 543(1)(c) inserted (with effect in accordance with s. 83(2) of the amending Act) by Finance Act 2001 (c. 9), Sch. 28 para. 6(3)
F4S. 543(2A) inserted (with effect in accordance with s. 87(11) of the amending Act) by Finance Act 2002 (c. 23), s. 87(7)
Marginal Citations
M1Source-1970 s.397; 1975 Sch.2 13