Income Tax (Trading and Other Income) Act 2005 section 510

Requirement for transaction-related calculations in certain part surrender and assignment cases

Section 510 requires individual transaction-by-transaction gain calculations when a periodic calculation shows a gain at year-end but no chargeable event arises because one or both of the conditions in section 509 are met.

• When a periodic calculation under section 507 shows a gain but no chargeable event occurs under section 509, a separate calculation must be made for each relevant transaction (part surrender or assignment for value) during the insurance year
• A "relevant transaction" means either a surrender of part of or a share in the policy or contract rights, or an assignment of such a part or share in exchange for money or money's worth
• Where multiple relevant transactions occur in the same insurance year, the calculations must be performed in chronological order, one after the other, following the method set out in section 511
• For transactions in the final insurance year, the transaction-related calculations must be completed before any gain calculation under section 491 for the chargeable event that ends that year, though section 513(5) may disapply the calculation requirement for some transactions once a gains limit is reached