Commentary on Sections Structure of Chapters Overview Section 539: Relief for deficiencies
2121.Together with sections 540 and 541, this section is based on section 549 of ICTA. These sections provide a sort of “loss” relief where:
	the overall gain on a policy or contract is less than the amounts that were charged as gains on chargeable events occurring in earlier policy years; and
	the individual in question was the person liable to tax on those gains.
2122.The relief is only available to an individual. It only reduces tax charged at the higher rate or the “dividend upper rate” (the Schedule F upper rate in the source legislation).
2123.Under subsection (1), the relief is only given to an individual who would have been liable on a gain, had one arisen on the chargeable event in question. For this purpose, the requirement in section 465(1), that an individual must be UK resident to be liable, is disregarded. The effect of this is that a non-UK resident individual, who is not liable under section 465(1), but is chargeable to income tax on other income, is not denied the benefit of this relief.
2124.See also section 546 (table of provisions subject to special rules for older policies and contracts).