Commentary

D7.607 BLAGAB or eligible PHI business—the extent of exemption

Corporate tax
Corporate tax | Commentary

D7.607 BLAGAB or eligible PHI business—the extent of exemption

Corporate tax | Commentary

D7.607 BLAGAB or eligible PHI business—the extent of exemption

Three aspects as to the extent of exemption have proved difficult and controversial over a number of years. It has often been difficult to determine what is the correct position if a new member having no prior exempt contracts effects a policy above the limits. It has also proved difficult to determine whether a society can decline exemption in respect of particular policies or in particular years.

Policies exceeding exempt limits

If a policy exceeds exempt limits but the member has no other exempt business in force, it is questionable whether the contract can be split into an exempt part and a taxable part. In practice it is understood that HMRC take the view that such a split is permissible where limits are defined by benefits, as applies in the case of life policies issued before 1 September 1987 and to annuities. Where premium limits apply, as in the case of currently

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