After the first ten-year anniversary has passed, the exit charge rate is based on the rate of the most recent ten-year charge; a rate known as the ‘anniversary rate’. The exit charge rate is calculated by multiplying the anniversary rate by the appropriate fraction, i.e. as many fortieths as there are complete successive quarters in the period beginning with the most recent anniversary and ending with the date before the event causing the exit charge.
Where rates change, the exit charge is recalculated as if the new rate has applied at the time of the previous ten-year anniversary. This means recalculating a notional rate for the ten year charge.