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Version Superseded: 11/05/2001
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Income and Corporation Taxes Act 1988, Section 549 is up to date with all changes known to be in force on or before 05 September 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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M1(1)Subject to subsection (2) below, where such an excess as is mentioned in section 541(1)(a) or (b) or 543(1)(a)—
(a)would be treated as a gain arising in connection with a policy or contract, and
(b)would form part of an individual’s total income for the year of assessment in which the final year ends,
a corresponding deficiency occurring at the end of the final year shall be allowable as a deduction from his total income for that year of assessment, so far as it does not exceed the total amount treated as a gain by virtue of section 541(1)(d) or 543(1)(c) on the previous happenings of chargeable events.
(2)Except where the deficiency mentioned in subsection (1) above occurs in connection with a contract for a life annuity made after 26th March 1974 [F1but in an accounting period of the insurance company or friendly society beginning before 1st January 1992,] the deduction allowable under that subsection shall be made only for the purposes of ascertaining the individual’s excess liability, that is to say, the excess (if any) of his liability to income tax over what it would be if all income tax [F2not chargeable [F3at the starting rate]][F4were chargeable at the basic rate, or (so far as applicable in accordance with [F5section 1A]) the lower rate [F6or the Schedule F ordinary rate],] to the exclusion of [F7the higher rate and the Schedule F upper rate].
(3)In this section “final year” has the same meaning as in section 546.
Textual Amendments
F1Words in s. 549(2) substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 48, Sch. 7 para. 9(4)
F2Words in s. 549(2) inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 19(3)(7)
F3Words in s. 549(2) substituted (with application in accordance with s. 22(12) of the amending Act) by Finance Act 1999 (c. 16), s. 22(9)(a)
F4Words in s. 549(2) substituted (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by 1993 c. 34, s. 79, SCh. 6 paras. 6, 25(1)
F5Words in s. 549(2) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 13
F6Words in s. 549(2) inserted (with effect in accordance with Sch. 4 para. 13(2) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 13(1)(a)
F7Words in s. 549(2) substituted (with effect in accordance with Sch. 4 para. 13(2) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 13(1)(b)
Marginal Citations
M1Source-1975 Sch.2 19; 1975 (No.2) s.40
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