Income Tax (Trading and Other Income) Act 2005 section 423

Meaning of "purchased life annuity"

Section 423 defines what constitutes a "purchased life annuity" for the purposes of this chapter of the Act.

• A purchased life annuity is one granted in return for payment in money or money's worth by a business that routinely provides life annuities
• The annuity must be payable for a term that can only be determined by reference to the end of a human life
• The annuity still qualifies even if, in certain circumstances, payments may stop before or continue after the death of the person whose life is referenced
• This definition replaces the earlier definition found in section 657(1) of the Income and Corporation Taxes Act 1988