PART XIII MISCELLANEOUS SPECIAL PROVISIONS

C1C2C3C4C5C6C7C8CHAPTER II LIFE POLICIES, LIFE ANNUITIES AND CAPITAL REDEMPTION POLICIES

Annotations:
Modifications etc. (not altering text)
C1

Pt. 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)

C3

Pt. 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)

C8

Pt. 13 Ch. 2 modified (with effect in accordance with Sch. 13 para. 5 of the modifying Act) by Finance Act 2008 (c. 9), Sch. 13 para. 6

F1546B Special provision in respect of certain section 546 excesses

1

This section applies in relation to a policy or contract in any case where—

a

a section 546 excess occurs at the end of any year (including the final year, whether or not ending with a terminal chargeable event); and

b

the condition in subsection (2) below is satisfied in relation to that year.

F2This subsection is subject to subsection (1A) below.

F31A

In the case of a policy which is a qualifying policy (whether or not the premiums under the policy are eligible for relief under section 266) this section applies only if—

a

the section 546 excess occurs within the time described in section 540(1)(b)(i); or

b

the policy has been converted into a paid-up policy within that time.

2

The condition is that—

a

during the year there has been an assignment for money or money’s worth of part of or a share in the rights conferred by the policy or contract; or

b

during the year there has been both—

i

an assignment, otherwise than for money or money’s worth, of the whole or part of or a share in the rights conferred by the policy or contract; and

ii

an earlier surrender of part of or a share in the rights conferred by the policy or contract.

3

Where this section applies—

a

the occurrence of the section 546 excess shall be treated for the purposes of this Chapter as not being a chargeable event; but

b

the amount of the section 546 excess shall be charged to tax in accordance with the provisions of section 546C.

4

In this section—

  • “final year” has the meaning given by section 546(4);

  • “section 546 excess”, in relation to any year, means an excess, occurring at the end of the year, of—

    1. a

      the reckonable aggregate value mentioned in subsection (2) of section 546, over

    2. b

      the allowable aggregate amount mentoned in subsection (3) of that section;

  • “terminal chargeable event” means any chargeable event other than—

a

an assignment for money or money’s worth of the whole of the rights conferred by the policy or contract;

b

the occurrence of a section 546 excess; or

c

a chargeable event by virtue of section 546C(7)(a);

“year” has the meaning given by section 546(4).