Income Tax (Trading and Other Income) Act 2005 section 492

The total benefit value of a policy or contract

Section 492 explains how to calculate the total benefit value of a life insurance policy or capital redemption contract, which is needed when working out chargeable gains under section 491.

• The total benefit value is the sum of the policy's value at the time of the chargeable event plus all capital sums, capital benefits, qualifying loans, and certain payments received before the event
• Where insurer loans or guaranteed income bond payments have been made before the event, these are included because they are treated as partial surrenders of rights under the policy
• If the chargeable event is an assignment, the value of any share in the policy rights previously assigned must also be added in, along with capital amounts from any related policy
• Certain amounts are excluded from the calculation under section 495, and trivial inducement benefits are disregarded under section 497