20(1)M1 Where, as a result of a variation in the life or lives for the time being assured, a qualifying policy (“the earlier policy”) is replaced by a new policy (“the later policy”) which in accordance with the rules in paragraph 17 above is also a qualifying policy, then, subject to sub-paragraph (2) below, for the purposes of—
(a)sections 268 to 270 and 540 and 541; and
(b)any second or subsequent application of this paragraph;
the later policy and the earlier policy shall be treated 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 earlier policy was issued; and, accordingly, so long as the later policy continues to be a qualifying policy, the single policy shall also be treated as a qualifying policy for those purposes.
(2)Sub-paragraph (1) above does not apply unless—
(a)any sum which would otherwise become payable by the insurer on or in connection with the coming to an end of the earlier policy is retained by the insurer and applied in the discharge of some or all of the liability for any premium becoming due under the later policy; and
(b)no consideration in money or money’s worth (other than the benefits for which provision is made by the later policy) is receivable by any person on or in connection with the coming to an end of the earlier policy or the coming into existence of the later policy.
(3)Any sum which is applied as mentioned in sub-paragraph (2)(a) above—
(a)shall be left out of account in determining, for the purposes of sections 268 to 270 and 540 and 541, the total amount which at any time has been paid by way of premiums under the single policy referred to in sub-paragraph (1) above; and
(b)shall not be regarded, in relation to that single policy, as a relevant capital payment, within the meaning of section 541.
(4)This paragraph applies where the later policy comes into existence on or after 25th March 1982.
Marginal Citations
M1Source—1982 s.34