Section 562 | Contract to be loan relationship

(1)If a relevant company is a party to an investment life insurance contract, for the purposes of Part 5 (loan relationships) the contract is, in relation to the company, a creditor relationship of the company.

(2)Subsection (1) is subject to subsection (4).

(3)Subsection (4) applies if—

(a)the amount or value of a lump sum payable under an investment life contract by reason of death or the onset of critical illness, exceeds

(b)the surrender value of the contract immediately before the time when the lump sum becomes payable.

(4)If this subsection applies, that excess is not to be brought into account as a credit under Part 5 representing a profit from a related transaction arising as a result of the lump sum becoming payable.