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(1) A retained replacement policy premium is ignored in calculating—
(a) the total benefit value of a policy under section 492(1), or
(b) the total allowable deductions for a policy under section 494(1).
(2) In subsection (1) “retained replacement policy premium” means a sum which—
(a) has been payable under a policy which is one of two or more policies treated as a single policy under section 542(1) (qualifying policies and policies replacing them), and
(b) is such a sum as is mentioned in section 542(4) and meets the condition in that section.
(3) For the purposes of section 492(1)(b) and (c) (total benefit value: capital sums and benefits paid or conferred before the event in question), any sum paid or benefit conferred under a policy is ignored if it is attributable to a person's disability.
(4) For the purposes of section 492(1)(f) (total benefit value: assignments), a share assigned before the event is ignored if—
(a) it was assigned in an insurance year (see section 499) that began on or after 6th April 2001, and
(b) it was not assigned for money or money's worth.
(5) The reference to the policy in subsection (3) includes any related policy.
This Act comes into force on 6 April 2005 and has effect, for the purposes of income tax for the year 2005–06 and subsequent tax years, and for the purposes of corporation tax for accounting periods ending after 5 April 2005: see s 883; for transitional provisions and savings see Sch 2 hereto.