Taxes Consolidation Act 1997 section 786

Approval of certain other contracts

Section 786 requires that a retirement annuity contract must include an open market option allowing the transfer of accrued rights to another provider as a condition of Revenue approval.

• Revenue may not approve a retirement annuity contract under section 784 unless it includes a provision allowing the individual to require the transfer of the value of accrued rights to another annuity provider of the individual's choice.
• The transferred sum must be applied by the new provider towards the premium or other consideration under an approved annuity contract between that provider and the individual — this transferability requirement is known as the "open market option".
• References to the individual include any widow, widower, surviving civil partner or dependant who has accrued rights under the contract.
• Where accrued rights are transferred from an original contract (approved under section 784 or section 785) to a substituted contract, any annuity payable under the substituted contract is treated as earned income of the annuitant to the same extent as an annuity under the original contract would have been.