Section EY 31 — Income Tax Act 2007: Annuities

EY 31 Annuities When this section applies (1) This section applies when a life insurance policy is an annuity. Adjustment (2) For the income year, a life insurer has an amount calculated for the relevant annuities using the formula— closing actuarial reserves − (0.99 × expected death strain). Definition of items in formula (3) In the formula,— (a) closing actuarial reserves is the life insurer’s closing actuarial reserves (active annuities), calculated in accordance with section EZ 59(2) (Meaning of actuarial reserves): (b) expected death strain is the amount calculated under the expected death strain formula (active annuities) in accordance with sections EZ 53 to EZ 60 (which relate to the transitional adjustment for expected death strain) for the income year. Positive and negative amounts (4) If the formula in subsection (2) gives a positive amount, the life insurer has that amount as income included in their shareholder base income. If the formula in subsection (2) gives a negative amount, the life insurer has that amount as a deduction included in their shareholder base allowable deductions. Defined in this Act: amount , income year , life insurance policy , life insurer , shareholder base allowable deduction , shareholder base income Section EY 31: substituted, on 1 July 2010, by section 190(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).