Commentary

V18.105 Insurance contracts covering taxable and non-taxable risks

Part V18 Insurance Premium Tax

V18.105 Insurance contracts covering taxable and non-taxable risks

V18.105 Insurance contracts covering taxable and non-taxable risks

If an insurance contract covers taxable and exempt risks, or risks which are subject to tax at the standard or higher rates of tax1 the premium must be apportioned between them on a basis that is just and reasonable2. HMRC has issued some guidance on apportionment formulae which it will normally consider to be acceptable but this does not preclude the insurer from using another method if he chooses provided it gives a just and reasonable result3. It should be noted that this is an area in which HMRC regularly takes an

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