541Calculation of deficienciesU.K.
(1)This section sets out how the amount of a deficiency treated as arising under section 540(1) on a chargeable event (“the later event”) is calculated.
(2)If, when the calculation in section 491(2) is made for the later event, the total allowable deductions equal or exceed the total benefit value, the amount of the deficiency is equal to the total previous gains.
(3)If, when that calculation is made, the total benefit value exceeds the total allowable deductions, the amount of the deficiency is equal to the total previous gains, less that excess.
(4)In this section “the total previous gains” means the total amount of gains that—
(a)were treated as arising on calculation events (other than personal portfolio bond events) occurring in relation to the policy or contract in question before the later event, and
(b)formed part of the total income of the individual mentioned in section 539(1) for a tax year earlier than the tax year mentioned in that section [F1 or formed part of the total income of that individual by virtue of section 465B for the tax year mentioned in section 539(1)].
Textual Amendments
F1Words in s. 541(4)(b) inserted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 143