Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Insurance Policyholder Taxation Manual

From
HM Revenue & Customs
Updated
, see all updates

Calculating gains: part surrenders and part assignments: ‘periodic calculations’ and ‘excess events’: definitions

‘Calculation event’

This means an ‘excess event’, a ‘part surrender or assignment event’, or a ‘personal portfolio bond event’.

‘Excess event’

This means a chargeable event where the event is a part surrender or part assignment of rights, and a ‘periodic calculation’ at the end of the ‘insurance year’ has shown a gain. See IPTM3560 and the explanation below.

‘Part surrender or assignment event’

This means a chargeable event where the event is a part surrender or part assignment of rights, and a ‘transaction-related calculation’ has shown a gain. See IPTM3580 and the explanation below.

‘Personal portfolio bond event’

This means a chargeable event where the special rules relating to personal portfolio bonds have shown a gain. See IPTM3600.

Distinguishing ‘excess events’ and ‘part surrender or assignment events’

The legislation specifically defines a ‘part surrender or assignment event’ at ITTOIA05/S514. Care is needed not to confuse this definition with the everyday use of the term ‘part surrender’.

If there are solely part surrenders during the ‘insurance year’ then a ‘part surrender or assignment event’ cannot arise. An ‘excess event’ as defined at ITTOIA05/S509 (1) will occur provided it is not the ‘final insurance year’ and the ‘periodic calculation’ described in ITTOIA05/S507 shows a gain - see IPTM3560.

A ‘part surrender or assignment event’will occur where the ‘periodic calculation’ shows a gain and there has been during the ‘insurance year’

  • a part assignment for value, or
  • both a part surrender and a later assignment or part assignment otherwise than for value.
Further reference and feedback IPTM1013