Income Tax (Trading and Other Income) Act 2005 section 484

Pre-10th December 1974 contracts for a life annuity: disapplication of section 484(1)(d)

Section 484(1)(d), as modified by Schedule 2 paragraph 99, provides that certain life annuity contracts entered into before 10th December 1974 are exempt from the chargeable event rules that would otherwise apply when a capital sum is paid on death.

• Section 484(1)(d) treats the payment of a capital sum on death under a life annuity contract as a chargeable event for income tax purposes.
• This chargeable event rule is disapplied where the life annuity contract was made before 10th December 1974.
• The exemption applies automatically based solely on the date the contract was entered into, with no further conditions to satisfy.
• Any capital sum paid on death under a qualifying pre-10th December 1974 life annuity contract falls outside the charge to income tax under these provisions.