The Insurance Premium Tax (Taxable Insurance Contracts) Order 1997

2.  Paragraph 2 of Schedule 7A to the Finance Act 1994(1) shall be amended as follows—

(a) in sub-paragraph (1) for the words “A contract falls” there shall be substituted “Subject to sub-paragraph (3) below, a contract falls”;

(b) after sub-paragraph (2) there shall be inserted—

“(3) A contract which would otherwise fall within this paragraph does not do so if it is for medical insurance.

(4) Subject to sub-paragraph (5) below, for the purposes of this paragraph a contract is a contract for medical insurance if it provides one or more of the following benefits,

whether or not their provision is subject to conditions or limitations—

(a) medical, dental or optical, consultation, diagnosis or treatment;

(b) alternative or complementary medical treatment or therapy;

(c) convalescent care;

(d) goods or services related to any of the above;

(e) payment or reimbursement of, or a grant towards, the whole or part of the cost of any of the above;

(f) payment of a specified sum for optical, dental or medical appointments;

(g) payment of a specified sum for each specified period of treatment as a hospital in-patient;

(h) payment of a specified sum for each specified period of convalescent care; or

(i) payment of a specified sum, except one to which sub-paragraph (6) below applies, when a person is diagnosed as requiring or has undergone a specified medical procedure.

(5) A benefit which would apart from this sub-paragraph fall within sub-paragraph (4) above shall not do so if, before he can become entitled to the benefit, the insured is required—

(a) to be suffering from a disability which so impairs his ability to carry out normal activities of daily living that he requires long term care, supervision or assistance; and

(b) to have been suffering from the disability for a continuous period of not less than 4 weeks.

(6) This sub-paragraph applies to a payment of a specified sum if the contract under which it is payable provides that only one such payment in relation to each specified medical procedure will be made in respect of each person in relation to whom benefit is payable under the contract.”.

(1)

Schedule 7A was inserted by S.I. 1994/1698.