Section 723: Determinations
2781.The exemption requires a claim to be made. This allows the Inland Revenue to determine whether an annuity is a purchased life annuity and the amount of any annuity payment which is exempt. This section deals with those questions and the consequences for the payer so far as deduction of tax at source is concerned. It is based on section 658 of ICTA.
2782.Subsection (1) provides that such questions are to be determined by the Inland Revenue. See Change 149 in Annex 1. Subsection (2) provides for appeals against determinations to go to the Special Commissioners.
2783.Under subsection (3) the payer of an annuity payment is entitled to rely on a determination, made and notified by the Inland Revenue, in determining how much income tax it may or must deduct from the annuity payments. But the words “and has not been notified of any alteration of that decision” in section 656(5) make little sense unless the payer is entitled to rely on that notification. Subsection (4) clarifies the position by making it clear that that notification is itself a determination.
2784.Special transitional provisions have been included in Schedule 2 (see paragraphs 143 and 145) to deal with determinations made before 6 April 2005 and to make it clear which provision applies if a false statement or representation is made either before or on or after 6 April 2005.
