Section 719 | Extent of exemption under section 717

(1)This section sets out the rules for determining the extent to which an annuity payment is within the exemption in section 717(1).

(2)The rules depend on—

(a)whether or not the amount of the annuity payments under the annuity depends solely on the duration of a human life or lives (see subsections (3) to (5)), and

(b)whether or not the annuity's term depends solely on the duration of a human life or lives (see subsections (6) to (8)).

(3)If the amount of the annuity payments depends solely on the duration of a human life or lives, the same proportion of each payment (“the exempt proportion”) is exempt.

(4)But if the amount of the annuity payments also depends on another contingency, each payment is exempt so far as it does not exceed a fixed sum (“the exempt sum”).

(5)If an annuity payment within subsection (4) is less than the exempt sum, the shortfall is added to the exempt sum for the next payment (and so on).

(6)The ways to determine the exempt proportion and the exempt sum differ according to whether or not the annuity's term depends solely on the duration of a human life or lives.

(7)If the annuity's term depends solely on the duration of a human life or lives—

(a)the exempt proportion is determined as set out in section 720, and

(b)the exempt sum is determined as set out in section 721.

(8)If the annuity's term also depends on another contingency—

(a)the exempt proportion is the proportion which is just and reasonable, having regard to the contingencies affecting the annuity and to section 720, and

(b)the exempt sum is the amount which is just and reasonable, having regard to the contingencies affecting the annuity and to section 721.