Commentary

E1.430 Purchased life annuities—partial exemption

Personal and employment tax

E1.430 Purchased life annuities—partial exemption

E1.430 Purchased life annuities—partial exemption

It is recognised both commercially and for tax purposes that an annuity payment under a PLA contains a capital element and a revenue element.

The recipient of a PLA payment is exempt from tax for the part of the payment representing the capital element (see E1.430D for claims and administration)1.

If the amount of the annuity payment depends solely on the duration of a human life or lives, the same proportion of each payment ('the exempt proportion', see E1.430A) is exempt. But if the amount depends on some other contingency, each payment is exempt to the extent

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