V18.114 Taxable intermediaries and their feesAn anti-avoidance measure was also introduced in respect of fees charged after 19 March 1997 to ensure that premiums subject to a higher rate of tax are not split into taxable and non-taxable elements to reduce the tax payable. It provides that in certain circumstances a fee charged by an intermediary, who for the purposes of the legislation is known as a taxable intermediary, is treated as a premium received under an insurance contract and liable to the higher rate.A fee will be so treated if it is1: • a fee charged which is over and above the insurance premium at or about the time when the insurance contract is taken out • charged in connection with that contract which is liable in whole or in part to the higher rate • charged in connection with an insurance related service • charged to the insured
An anti-avoidance measure was also introduced in respect of fees charged after 19 March 1997 to ensure that premiums subject to a higher rate of tax are not split into taxable and non-taxable elements to reduce the tax payable. It provides that in certain circumstances a fee charged by an intermediary, who for the purposes of the legislation is known as a taxable intermediary, is treated as a premium received under an insurance contract and liable to the higher rate.
A fee will be so treated if it is1:
• a fee charged which is over and above the insurance premium at or about the time when the insurance contract is taken out
• charged in connection with that contract which is liable in whole or in part to the higher rate
• charged in connection with an insurance related service
• charged to the insured
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