Income Tax (Trading and Other Income) Act 2005 section 500

Events treated as part surrenders

Section 500 identifies four specific events that are treated as a partial surrender of rights under a life insurance policy or annuity contract, even though they might not normally be regarded as such.

• A profit-sharing payment falling due under a policy or contract where the policyholder retains further rights under it is treated as a part surrender
• Taking a capital sum as a partial alternative to annuity payments under a life annuity contract counts as a part surrender
• The making of a policy loan within the scope of section 501 is treated as a part surrender
• Payments made by insurers under guaranteed income bonds, as covered by section 504, are treated as part surrenders