Finance Act 2003

4 (1) Where— U.K.

(a) on 9th April 2003 a policy of life insurance issued in respect of an insurance made before that date is a group life policy but the conditions in section 539A of the Taxes Act 1988 are not satisfied,

(b) on or after that date, the terms of the policy are varied so that those conditions are satisfied before 6th April 2004, and

(c) during the period beginning with 9th April 2003 and ending with the date when the variation takes effect (“the transitional period”), no sums become payable, and no other benefits arise, under the policy except on death or disability,

the conditions in section 539A of the Taxes Act 1988 shall be taken for the purposes of Chapter 2 of Part 13 of the Taxes Act 1988 to have been satisfied with respect to the policy throughout the transitional period.

(2) Where, for the purposes of Chapter 2 of Part 13 of the Taxes Act 1988,—

(a) on 9th April 2003 a policy of life insurance issued in respect of an insurance made before that date (“the old policy”) is a group life policy but the conditions in section 539A of the Taxes Act 1988 are not satisfied,

(b) on or after that date, the terms of the insurance are varied solely for the purpose of securing that those conditions are satisfied before 6th April 2004 with respect to a policy in respect of the insurance, and

(c) as a result of the variation, the old policy is replaced by a new policy (“the new policy”),

sub-paragraph (3) applies.

(3) Where this sub-paragraph applies—

(a) the old policy and the new policy shall be treated for the purposes of—

(i) paragraph 3(1),

(ii) sub-paragraph (1), and

(iii) Chapter 2 of Part 13 of the Taxes Act 1988,

as a single policy issued in respect of an insurance made at the time of the making of the insurance in respect of which the old policy was issued, and

(b) that deemed single policy shall be treated for the purposes of sub-paragraph (1) as if the variation mentioned in sub-paragraph (2)(b) had been a variation of its terms taking effect on the date on which that variation takes effect (but not resulting in the replacement of the deemed single policy).