7A(1)  This regulation applies where the amount of investment return on a policy or contract, as calculated in accordance with regulation 3, 4 or 5, is less than zero (“the negative amount”).

7A(2)  The negative amount may be set off in the following order against the following amounts–

(a)first, the amount of any income (other than any investment return which is treated under these Regulations as accruing) which–

(i)accrues in the same accounting period as that in which the negative amount is treated as accruing; and

(ii)is referable to basic life assurance and general annuity business and is charged to tax under Case VI of Schedule D;

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