PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS
CHAPTER I PERSONAL RELIEFS
The reliefs
266 Life assurance premiums.
1
M1Subject to the provisions of this section, F1section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004, an individual who pays any such premium as is specified in subsection (2) below or makes a payment falling within subsection (7) below shall (without making any claim) be entitled to relief under this section.
2
M2The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where—
a
the payments are made to —
F2i
a person who has permission under Part 4 of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or
ii
a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000;
iv
in the case of a deferred annuity, the National Debt Commissioners; and
b
the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse F3or civil partner; and
c
the insurance or contract was made by him or his spouse F3or civil partner.
3
Subject to subsections (7), (10) and (11) below, no relief under this section shall be given—
a
M3except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not;
b
M4in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy;
c
d
M6in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance.
4
M7Subject to F16subsections (7) and (8) below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year.
5
Subject to the provisions of Schedule 14—
a
an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to F512.5 per cent. of the payment; and
b
the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board.
6
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6A
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7
M14Where a person makes a payment to a trade union as defined in section 28(1) of the M15Trade Union and Labour Relations Act 1974, and part of that payment is attributable to the provision of superannuation, life insurance or funeral benefits, he shall be entitled to relief under this section in respect of that part of the payment, but—
a
subsection (4) above shall not apply; and
b
F17in calculating his net income there shall be deducted an amount equal to one-half of that part of the payment.
This subsection shall also apply in relation to any payment made to an organisation of persons in police service but only where the annual amount of the part of the payment attributable to the provision of the benefits in question is £20 or more.
8
9
10
M10Subsection (3)(b) above shall not apply—
a
to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or
b
to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV.
In the application of this subsection to Scotland, for any reference to a mortgage there shall be substituted a reference to a heritable security within the meaning of the M11Conveyancing (Scotland) Act 1924 (but including a security constituted by ex facie absolute disposition or assignation).
11
M12Subsection (3)(a) and (d) above shall not affect premiums payable—
a
under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the F10spouse, F11civil partner, widow, widower F12, surviving civil partner or children or other dependants of any such employee or person, or
b
under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers.
12
Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section.
F1313
In F14. . . Schedule 14, “friendly society” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act).
F1514
In subsection (2)(a)—
“contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and
“member of the society” has the same meaning as in Lloyd’s Act 1982 M13.