SCHEDULE 2Transitionals and savings etc.
Part 6Savings and investment income: insurance contracts and policies made before certain dates
Contracts in accounting periods beginning before 1st January 1992: disapplication of sections 530 and 539(3)
109
(1)
This paragraph applies to a contract for a life annuity made—
(a)
after 26th March 1974, but
(b)
in an accounting period of the insurance company or friendly society beginning before 1st January 1992.
(2)
Section 530 (income tax treated as paid etc.) does not apply to gains from such a contract, except for the purposes of calculating relief under section 535 (top slicing relief).
(3)
Sub-paragraph (2) is subject to—
(a)
section 532 (relief for policies and contracts with European Economic Area insurers), and
(b)
section 534 (regulations providing for relief in other cases where foreign tax chargeable).
F1(4)
“(1)
A deficiency from a policy or contract arising on a chargeable event is allowable as a deduction in calculating an individual's net income for a tax year if, had a gain arisen instead on the chargeable event—
(a)
the individual would have been liable to income tax on the gain for that year, or
(b)
the individual would have been so liable apart from the requirement in section 465(1) that the individual must be UK resident in the tax year in which the gain arises.
(2)
See section 540 for the cases in which a deficiency is treated as arising from a policy or contract on a chargeable event, section 541 for how the deficiency is calculated and section 469(5) for the apportionment of deficiencies in cases where two or more persons are interested in a policy or contract.”
(5)
In sub-paragraph (1) “accounting period” is to be read in accordance with F2Chapter 2 of Part 2 of CTA 2009.