Part 4Savings and investment income

Chapter 9Gains from contracts for life insurance etc.

Personal portfolio bonds

522Method for making annual calculations under section 515

1

This section deals with the calculation required to be made in relation to a policy or contract as at the end of an insurance year under section 515 to determine—

a

whether a gain has arisen in relation to that year, and

b

if so, the amount of the gain.

2

There is a gain if, as at the end of the insurance year, the sum of PP and TPE exceeds TSG.

3

In subsection (2)—

  • PP is the total amount of premiums paid up to the end of the insurance year,

  • TPE is the total amount of personal portfolio bond excesses (see section 523), and

  • TSG is the total amount of part surrender gains (see section 524).

4

The gain is equal to 15% of the excess.