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HMRC internal manual

Insurance Policyholder Taxation Manual

Fundamental concepts: what is a purchased life annuity?

This is an annuity purchased from an insurer that must have a life contingency withinits terms. Often the annuity will be for life, but it could be for a term ascertainable byreference to life. For example, the annuity might end at the earlier of death or theexpiration of a fixed term or some other specified event. Or it might continue after deathfor a specified term or according to some other specified rule.

It does not include a pension annuity.

The statutory definition of purchased life annuity is at ITTOIA05/S423 andof life annuity is at ITTOIA05/S473. A more detailed discussion is at IPTM4220.

Further reference and feedback IPTM1013