Section EZ 56 — Income Tax Act 2007: Expected death strain formula (life): when annuity payable on death

EZ 56 Expected death strain formula (life): when annuity payable on death When this section applies (1) This section applies when, and to the extent to which, a life insurance policy provides for the payment of an annuity the start of which is contingent on the life insured’s death. Opening sum assured (2) In using the expected death strain formula (life), the life insurer uses as opening sum assured the present value (net) of the annuity. The present value (net) is determined— (a) at the start of the income year; and (b) on the assumption that the life insured died at the start of the income year; and (c) using the same assumptions and bases of calculation as are used to calculate the life insurer’s actuarial reserves for the income year. Defined in this Act: actuarial reserves , income year , life insurance policy , life insured , life insurer , payment present value (net) Section EZ 56: inserted, on 1 July 2010, by section 199(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).