Where a life insurance policy is issued, made, varied or substituted after 26 March 1974 and an annuity on the life of the insured is purchased and the benefit of the policy is vested in someone other than the person who purchased the annuity, then a transfer of value will be treated as having been made, unless it can be shown that the making of the insurance and the purchase of the annuity were not associated operations (see ¶16140). The person who purchased the annuity will be treated as having made the transfer of value by a disposition at the time the benefit of the policy became vested.

The value transferred is the lesser of:

(1)the total of:

(a)the price of the annuity; and

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