Commentary

E1.430A Purchased life annuities—the exempt proportion

Personal and employment tax

E1.430A Purchased life annuities—the exempt proportion

E1.430A Purchased life annuities—the exempt proportion

Where the term of the annuity depends solely on duration of human life

The exempt proportion of an annuity payment is:

where:

  1.  

         AP is the annuity payment

  2.  

         PP is the purchase price of the annuity (see E1.430C)

  3.  

         AV is the actuarial value of the annuity payments1

The amount of the annuity payment may change in accordance with the terms of the contract, but the fraction applied to it is constant.

The actuarial value is the value of the payments at the date when the first payment starts to accrue. It is calculated from mortality

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