Income Tax (Trading and Other Income) Act 2005

532 Relief for policies and contracts with European Economic Area insurers U.K.

(1) Section 530 applies to a gain from a foreign policy of life insurance or a foreign capital redemption policy or to a gain from a contract for a life annuity (and accordingly section 531 and paragraph 109(2) of Schedule 2 do not apply) if a claim is made that conditions A to C have been met throughout the policy period.

(2) Condition A is that the company liable to make payments under the policy or contract (“the insurer”) has not been UK resident.

(3) Condition B is that a comparable EEA tax charge has applied to the insurer (see section 533).

(4) Condition C is that no excluded reinsurance contract has been made in relation to the policy or contract.

(5) In this section—

• “excluded reinsurance contract”, in relation to a policy or contract, means any reinsurance contract—

  (a)

  wholly or partly covering any of the insurer's obligations to pay any sum or to meet any other liability arising under the policy or contract, and

  (b)

  relating to risk other than that the individual whose life is insured by the policy or the annuitant will die or suffer any sickness or accident,

• “policy period”—

  (a)

  in relation to a policy, means the period between—

  (i)

  the making of the insurance or contract, and

  (ii)

  the date on which the gain arises,

  but excluding any period when the conditions in paragraph 24(3) of Schedule 15 to ICTA are met (conditions that are required to be met for certain policies issued by non-UK resident companies to be qualifying policies), and

  (b)

  in relation to a contract for a life annuity, means the period between—

  (i)

  the date the insurer entered into the contract, and

  (ii)

  the date on which the gain arises,

  but excluding any period when the contract fell to be regarded as forming part of a basic life assurance and general annuity business the income and gains of which were subject to corporation tax.