The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001

Insurance Premium Tax: Contracts that are not taxable

346.—(1) Schedule 7A to the Finance Act 1994(1) (insurance premium tax) is amended as follows.

(2) In paragraph 2(1) (contracts constituting long term business) for the words from “if it is one” to the end of that sub-paragraph substitute “if it is exclusively a contract of long-term insurance.”.

(3) For paragraph 2(2) substitute—

“(2) In deciding whether a contract is exclusively a contract of long-term insurance, as is mentioned in sub-paragraph (1) above, where—

(a) the contract includes cover for risks relating to accident or sickness;

(b) the contract contains related and subsidiary provisions such that it might also be regarded as a contract of general insurance, but is treated as a contract of long-term insurance for the purposes of any relevant order made under section 22 of the Financial Services and Markets Act 2000; and

(c) the contract was not entered into after 30th November 1993,

the inclusion of such cover shall be ignored.”

(4) In paragraph 4 (contracts relating to commercial ships)—

(a) in sub-paragraph (1) for the words from “a contract whose effecting” to the end of that sub-paragraph substitute “a contract of general insurance of a relevant class.”; and

(b) for sub-paragraph (2) substitute—

“(2) For the purposes of this paragraph, a contract of general insurance is of a relevant class if it insures against risks arising from or in relation to—

(a) accidents,

(b) ships, or

(c) liabilities of ships,

(and no other risks).”.

(5) In paragraph 5 (contracts relating to lifeboats and lifeboat equipment)—

(a) in sub-paragraph (1) for the words from “a contract whose effecting” to the end of that sub-paragraph substitute “a contract of general insurance of a relevant class.”; and

(b) for sub-paragraph (2) substitute—

“(2) For the purposes of this paragraph, a contract of general insurance is of a relevant class if it insures against risks arising from or in relation to—

(a) accidents,

(b) ships, or

(c) liabilities of ships,

(and no other risks).”.

(6) In paragraph 7 (contracts relating to commercial aircraft)—

(a) in sub-paragraph (1) for the words from “a contract whose effecting” to the end of that sub-paragraph substitute “a contract of general insurance of a relevant class.”; and

(b) for sub-paragraph (2) substitute—

“(2) For the purposes of this paragraph, a contract of general insurance is of a relevant class if it insures against risks arising from or in relation to—

(a) accidents,

(b) aircraft, or

(c) aircraft liability,

(and no other risks).”.

(7) In paragraph 8 (contracts relating to risks outside the United Kingdom)—

(a) for sub-paragraph (2) substitute—

“(2) The question of whether a risk is situated in the United Kingdom shall be determined in accordance with regulations made under section 424(3) of the Financial Services and Markets Act 2000; but in determining that question as respects a contract which relates to a building it shall be irrelevant whether or not the contract also covers the contents of the building.”.

(8) In paragraph 9 (contracts relating to foreign or international railway rolling stock)—

(a) in sub-paragraph (1) for the words from “a contract whose effecting” to the end of that sub-paragraph substitute “a contract of general insurance of a relevant class.”; and

(b) for sub-paragraph (2) substitute—

“(2) For the purposes of this paragraph, a contract of general insurance is of a relevant class if it insures against risks arising from or in relation to—

(a) railway rolling stock, or

(b) general liability to third parties,

(and no other risks).”.

(9) In paragraph 10 (contracts relating to the Channel tunnel)—

(a) in sub-paragraph (1) for the words from “a contract whose effecting” to the end of that sub-paragraph substitute “a contract of general insurance of a relevant class.”; and

(b) for sub-paragraph (2) substitute—

“(2) For the purposes of this paragraph, a contract of general insurance is of a relevant class if it insures against risks arising from or in relation to—

(a) fire or natural forces,

(b) damage to property, or

(c) general liability to third parties,

(and no other risks).”.

(10) In paragraph 11—

(a) in sub-paragraph (1) for the words from “a contract whose effecting” to the end of that sub-paragraph substitute “a contract of general insurance of a relevant class.”; and

(b) for sub-paragraph (2) substitute—

“(2) For the purposes of this paragraph, a contract of general insurance is of a relevant class if it insures against risks arising from or in relation to—

(a) fire or natural forces,

(b) damage to property, or

(c) general liability to third parties,

(and no other risks).”.

(11) For paragraph 15(2)(c) (contracts relating to the provision of financial facilities) substitute—

“(c) the contract of insurance insures against risks arising from or in relation to either or both—

(i) credit,

(ii) suretyship.”.

(12) In Part II of the Schedule (Interpretation) after paragraph 16 insert—

“16A.   Paragraphs 2, 4, 5, 7, 8, 9, 10, 11 and 15 must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.”.

(1)

Inserted by S.I. 1994/1698, article 5; paragraph 15 repealed in part by S.I. 1996/2995, article 2.