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The following rules apply where

• a part of, or share in, the rights under a policy or contract is surrendered, or
• a part of, or share in, the rights under a policy or contract is assigned for money or money’s worth.

A calculation is made at the end of the ‘insurance year� - see IPTM3505 - in which the surrender or assignment occurs to determine whether a gain has arisen and, if so, its amount.

These events may variously be described as part surrenders, part withdrawals, or an ‘excess�. The meaning of ‘excess� is described at IPTM3555. Sometimes the term ‘allowable aggregate� is encountered which refers to the 5% allowable element rule discussed at IPTM1510 and IPTM3560.

There is a practical explanation of how ‘excess events� arise, with examples, at IPTM7615 onwards.