(1)    This section applies if a gain is treated as arising under this Chapter and either—

(a)    trustees who are non-UK resident would be liable for tax in respect of the gain as a result of section 467 if the trustees were UK resident immediately before the chargeable event in question occurs, or

(b)    immediately before that event occurs—

(i)    a foreign institution beneficially owns a share in the rights,

(ii)    the rights are held for the purposes of a foreign institution, or

(iii)    a share in them is held as security for a foreign institution's debt.

(2)    Section 740 of ICTA (which prevents avoidance of tax where an individual who is ordinarily UK resident benefits from a transfer of assets) applies with the modifications specified in subsection (3) or (4).

(3)    In a case within subsection (1)(a), section 740 applies as if—

(a)    the gain were income becoming payable to the trustees, and

(b)    that income arose to the trustees in the tax year in which the gain arises.

(4)    In a case within subsection (1)(b), section 740 applies as if—

(a)    the gain were income becoming payable to the institution, and

(b)    that income arose to the institution in the tax year in which the gain arises.

(5)    In this Chapter “foreign institution” means a company or other institution resident or domiciled outside the United Kingdom.

(6)    If there has been a surrender or assignment of only a part of or share in rights under the policy or contract, the references in this section to those rights are references to that part or share.