Income Tax (Trading and Other Income) Act 2005 section 462

When gains arise from policies and contracts

Section 462 explains when a gain is considered to arise from a life insurance policy, life annuity contract or capital redemption policy, by introducing the concept of a "chargeable event".

• A gain from a policy or contract arises when a chargeable event occurs in relation to that policy or contract.
• Some chargeable events only arise because a specific calculation carried out at a particular point in time shows that a gain has been made.
• Calculation-based chargeable events include periodic calculations following part surrenders or assignments, transaction-related calculations, and annual personal portfolio bond calculations.
• Where no calculation-triggered event applies, the gain simply arises at the point the chargeable event itself occurs.