Free legislation on LexisWeb is as enacted and does not take into account any amendments
(1) In the case of an annuity within section 719(7) (term dependent solely on duration of life), the exempt sum is—
PP x (1 / TY) x (PM / 12)
PP is the purchase price of the annuity,
TY is the expected term of the annuity in years (and any odd fraction of a year), and
PM is the period in months (and any odd fraction of a month) in respect of which the annuity payment is made.
(2) The purchase price of the annuity is the total amount or value of the consideration given for the annuity.
(3) The expected term of the annuity is the period from the date when the first annuity payment starts to accrue to the date when it is expected that the last payment will become payable.
(4) The expected term of the annuity is determined—
(a) as at the date when the first annuity payment starts to accrue,
(b) by reference to tables of mortality prescribed under section 724, and
(c) taking the age at that date of a person during whose life the annuity is payable as that person's age in whole years on that date.
(5) But if it is not possible to determine that term by reference to the tables mentioned in subsection (4)(b), it is such period as may be certified by the Government Actuary or the Deputy Government Actuary.
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.