Schedule 2: Transitionals and savings etc. Overview Paragraph 108: Pre-14th March 1989 policies and contracts: application of section 501
3615.This paragraph is based on section 548(3A) of ICTA. It limits the application of section 501 (loans by insurers giving rise to part surrenders) where:
	the policy or contract dates from before 14 March 1989; and
	the rights under the policy or contract were held in circumstances such that a company would be liable to tax under section 547(1)(b) of ICTA on a gain arising on that policy or contract.
3616.Sub-paragraphs (2) and (3) remove the limitation on the scope of section 501 if the policy is varied in certain ways. See the commentary above on the similar provision in paragraph 96 (pre-20th March 1968 policies and contracts excluded from Chapter 9 of Part 4). These sub-paragraphs do not apply to a life annuity contract. They are based on section 539(9) of ICTA.