Commentary

E1.1334 Rules for qualifying policies

Personal and employment tax

E1.1334 Rules for qualifying policies

E1.1334 Rules for qualifying policies

Although life assurance premium relief is abolished by restricting the relief to premiums becoming due and payable before 6 April 2015 and actually paid before 6 July 20151, the qualifying status of a policy continues to be relevant for tax purposes. A payment on surrender or maturity of a non-qualifying policy or restricted relief qualifying policy, or on the death of the life assured under such a policy, may give rise to a liability to tax in the hands of the policy holder (see E1.440–E1.456E).

FA 2013, Sch 9, para 3 inserted new paras B1–B3 into ICTA 1988, Sch 15 Pt 1, introducing new rules and requirements relating to qualifying policies.

For a life assurance policy issued on or after 6 April 2013 to be a qualifying policy, it must be beneficially owned by one individual or by two or more individuals together, or it must be protected. For this purpose a policy is protected if it is a new policy in substitution for a pre-21 March 2012 policy2. However, a new policy issued on or after 6 April 2013 cannot be a qualifying policy if the old policy was not a qualifying policy by virtue of3:

  1.  

    •     the premium limit for qualifying policies4;

  2.  

    •     rights not beneficially owned by individuals5;

  3.  

    •     an assignment (other than an excepted assignment) on or after 6 April 20136;

  4.  

    •     failure to provide a required statement7; or

  5.  

    •     an earlier application of this provision8.

Before 6 April 2013, pre-existing rules on

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