Commentary

E1.545 Extent of exemption

Personal and employment tax

E1.545 Extent of exemption

E1.545 Extent of exemption

The exemption for a payment made under a purchased life annuity only applies to part of the payment. Rules determine the extent to which the annuity payment is exempt1.

The rules depend on whether both the amount of the annuity and the term of the annuity depend solely on the duration of a human life or lives2.

If the amount of the annuity payment depends solely on the duration of human life or lives, the same proportion of each payment is exempt3. This is referred to as the exempt proportion. However, if the amount of the annuity payments

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