Modifications etc. (not altering text)
C1Pt. 4 Ch. 9 applied (with modifications) by The Individual Savings Account Regulations 1998 (S.I. 1998/1870), reg. 36 (as added by S.I. 1998/3174, reg. 12 and as amended (6.4.2008) by S.I. 2008/704, regs. 1, 17(4))
C2Pt. 4 Ch. 9 applied (with modifications) by The Child Trust Funds Regulations 2004 (S.I. 2004/1450), reg. 38 (as amended (6.4.2010) by S.I. 2010/582, regs. 1, 18)
C3Pt. 4 Ch. 9: power to exclude conferred (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 61(4) (with s. 147, Sch. 17)
(1)This section applies if—
(a)immediately before a chargeable event the rights under the policy or contract, or the part of or share in them in question, were held on non-charitable trusts,
(b)an individual is liable for tax under this Chapter for the tax year on the gain from the event, and
(c)the income tax for which the individual is liable for the tax year, after any relief available in respect of the gain under section 535 (top slicing relief), exceeds that for which the individual would have been liable apart from the event.
(2)The individual is entitled to recover that excess from the trustees, subject to the restriction specified in subsection (3).
(3)The amount recovered must not exceed the total of—
(a)any sums received by the trustees because of the chargeable event, and
(b)the value of any benefits so received.
(4)If the individual's relief under section 535 for the tax year does not relate only to the gain from the event in question, for the purposes of subsection (1)(c) a proportionate part of that relief is taken to be relief in respect of that gain.
(5)An individual may require the Inland Revenue to certify an amount recoverable by the individual under this section.
(6)Such a certificate is conclusive evidence of the amount.
[F1(7)Subsection (8) applies where—
(a)an individual has recovered an amount from trustees under this section, and
(b)subsequently the individual's liability to tax under this Chapter has been reduced (or removed) as a result of a recalculation under section 507A or 512A.
(8)The individual must repay to the trustees the amount (if any) by which the recovered amount exceeds the individual's revised entitlement.
(9)In subsection (8) the individual's revised entitlement is the amount to which the individual is entitled under this section calculated by reference to the individual's liability to tax under this Chapter as reduced (or removed) as a result of the recalculation under section 507A or 512A.]
Textual Amendments
F1S. 538(7)-(9) inserted (16.11.2017) (with effect in accordance with s. 9(5) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 9(4)