IPTM3555 - 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(1). 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, during the insurance year, there has been:
- a part assignment for value, or
- both a part surrender and a later assignment or part assignment otherwise than for value.