PART XIII MISCELLANEOUS SPECIAL PROVISIONS
C1CHAPTER VI OTHER PROVISIONS
Miscellaneous
F1580CRelief from tax on annual payments under immediate needs annuities
1
No liability to income tax arises in respect of a relevant annual payment made under an immediate needs annuity to the extent that—
a
it is made for the benefit of the person protected under the immediate needs annuity, and
b
it is made to a care provider or a local authority in respect of the provision of care for the person protected.
2
In this section “relevant annual payment” means an annual payment which—
a
would (apart from this section) be brought into charge under Case III of Schedule D, or
b
is equivalent to a description of payment brought into charge under Case III of that Schedule but would (apart from this section) be brought into charge under Case V of that Schedule.
3
In this section “immediate needs annuity” means a contract for a life annuity—
a
the purpose, or one of the purposes, of which is to protect a person against the consequences of his being unable, at the time the contract is made, to live independently without assistance because of—
i
mental or physical impairment, or
ii
injury, sickness or other infirmity,
which is expected to be permanent, and
b
under which benefits are payable in respect of the provision of care for the person protected.
4
In this section “care provider” means a person who carries on a trade, profession or vocation which consists of or includes the provision of care and who—
a
in relation to care provided in England and Wales or Northern Ireland, is registered under the relevant enactment in respect of the provision of care;
b
in relation to care provided in Scotland, provides care which is registered under the relevant enactment;
c
in relation to care provided in a territory outside the United Kingdom, satisfies comparable requirements under the law of that territory relating to the provision of care.
5
In this section “the relevant enactment” means—
a
in relation to England and Wales, Part 2 of the Care Standards Act 2000,
b
in relation to Scotland, Part 1 of the Regulation of Care (Scotland) Act 2001,
c
in relation to Northern Ireland, Part 2 or 3 of the Registered Homes (Northern Ireland) Order 1992 or Part 3 of the Health and Personal Social Services (Quality, Improvement and Regulation) (Northern Ireland) Order 2003.
6
In this section “care” means accommodation, goods or services which it is necessary or desirable to provide to a person because of—
a
mental or physical impairment, or
b
injury, sickness or other infirmity,
which is expected to be permanent.
7
In this section “life annuity” means an annuity to which section 656 (read with section 657) applies.
8
The Treasury may by order amend—
a
the definition of “immediate needs annuity” in subsection (3) above;
b
the definitions of “care provider” in subsection (4) above and of “the relevant enactment” in subsection (5) above.
Pt 13 Ch. 6: ss. 573, 575 and 576 transposed to Pt. 13 Ch. 5A (6.4.2007 with effect in accordance with s. 1034(1) of the affecting Act) by Income Tax Act 2007 (c. 3), Sch. 1 paras. 117(3), 119(7), 120(7) (with Sch. 2)