Commentary

E1.1325 Other special provisions

Personal and employment tax

E1.1325 Other special provisions

E1.1325 Other special provisions

Exceptional risk of death or disability

Life assurance premium relief is abolished in respect of all policies with effect from, broadly, 6 April 2015 (see E1.1300).

In determining whether policies qualify for premium relief there is to be disregarded the portion of the premiums charged for an exceptional risk of death or disability, and any provision for the same reason whereby a sum may be chargeable as a debt against the capital sum guaranteed on death. Before FA 2003, these policies were described as providing cover for exceptional mortality risk. That phrase was replaced by the words 'exceptional risk of death or disability' with the latter wording being deemed to have always had effect1. This change was designed to prevent qualifying status being lost if the insurer removed either a charge on policy proceeds or a previous loading because the insured person had an exceptional risk of suffering disability or critical illness.

Connected policies

Where one policy depends upon another, neither policy qualifies unless they would qualify if taken together2.

Premiums paid out of sums due under previous policies

If a life assurance company discharges a premium for a new policy out of the proceeds of an old policy, the following conditions must be satisfied for the new policy to be a qualifying policy3:

  1.  

    (a)     the old and the new policies must be issued by the same company; and

  2.  

    (b)     the proposer must be the same person (or the same set of trustees) for both policies; and either:

    1.  

      (1)    

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