Commentary

V18.101 Introduction to IPT

Part V18 Insurance Premium Tax

V18.101 Introduction to IPT

General principles of insurance premium tax

V18.101 Introduction to IPT

Insurance premium tax (IPT) is charged on taxable insurance contracts1 received on or after 1 October 19942 which cover risks located in the UK. There is no legal definition of insurance but HMRC regards insurance as the 'act, system, or business of providing financial protection against specified contingencies such as death, loss or damage. Life insurance is widely referred to as assurance although the words are interchangeable'3.

The tax is under the care and management of HMRC4.

IPT is due on the chargeable amount5 which is the amount which, with the addition of the tax, equals the premium due under the contract of

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