Section 419 | Gifts and benefits linked to periods of less than 12 months

(1)This section modifies the application of section 418(2) in relation to a gift if condition A, B, C or D is met.

(2)Condition A is that a benefit associated with the gift relates to a period of less than 12 months.

(3)Condition B is that a benefit associated with the gift consists of a right to receive benefits at intervals over a period of less than 12 months.

(4)Condition C is that a benefit associated with the gift is one of a series of benefits which are—

(a)received at intervals, and

(b)associated with a series of gifts made at intervals of less than 12 months.

(5)Condition D is that—

(a)a benefit associated with the gift is not one of a series of benefits received at intervals, and

(b)the gift is one of a series of gifts made at intervals of less than 12 months.

(6)If condition A, B or C is met, then for the purposes of section 418(2)—

(a)the value of the benefit is taken to be the annual equivalent of its actual value, and

(b)the amount of the gift is taken to be the annual equivalent of its actual amount.

(7)If condition D is met, the amount of the gift is taken for the purposes of section 418(2) to be the annual equivalent of its actual amount.

(8)The annual equivalent of the value of a benefit, or of the amount of a gift, is calculated as follows.Step 1Multiply the value or amount by 365.Step 2If condition A or B is met in relation to the benefit (and neither condition C nor condition D is met in relation to it), divide the result by the number of days in the period of less than 12 months referred to in subsection (2) or (as the case may be) subsection (3).If condition C or D is met in relation to the benefit, divide the result by the average number of days in the intervals of less than 12 months referred to in subsection (4)(b) or (as the case may be) subsection (5)(b).