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HMRC internal manual

Insurance Policyholder Taxation Manual

Computation of PPB gain and person taxable

When PPB gains arise and computation of gain

PPB gains arise on a policy on the final day of an insurance year, see IPTM3505, except on the final insurance year, when no PPB gain can arise. The gain is taxable in the tax year in which the end of the insurance year falls. The first tax year for which a PPB gain can arise is 2000-2001.

IPTM3650 describes the method of calculation of PPB gains and IPTM3660 gives an example of the calculation.