Finance Act 1994

70 Interpretation: taxable insurance contracts

(1) Subject to the following provisions of this section, any contract of insurance is a taxable insurance contract.

(2) A contract is not a taxable insurance contract if it fulfils one or more of the following conditions—

(a) the contract is a contract of reinsurance;

(b) the contract is one whose effecting and carrying out constitutes business of one or more of the classes specified in Schedule 1 to the [1982 c. 50.] Insurance Companies Act 1982 (long term business) and constitutes only such business;

(c) the contract relates only to a motor vehicle where the conditions mentioned in subsection (3) below are satisfied;

(d) the contract relates only to a commercial ship and is a contract whose effecting and carrying out constitutes business of one or more of the relevant classes and constitutes only such business;

(e) the contract relates only to a lifeboat and is a contract whose effecting and carrying out constitutes business of one or more of the relevant classes and constitutes only such business;

(f) the contract relates only to a lifeboat and lifeboat equipment and is such that, if it related only to a lifeboat, it would fall within paragraph (e) above;

(g) the contract relates only to a commercial aircraft and is a contract whose effecting and carrying out constitutes business of one or more of the relevant classes and constitutes only such business;

(h) the contract relates to one risk which is situated outside the United Kingdom;

(i) the contract relates to two or more risks each of which is situated outside the United Kingdom;

(j) the contract relates only to loss of or damage to foreign or international railway rolling stock;

(k) the contract relates only to loss of or damage to goods in foreign or international transit and the insured enters into the contract in the course of a business carried on by him;

(l) the contract relates only to credit granted in relation to relevant supplies falling within section 1(1) of the [1991 c. 67.] Export and Investment Guarantees Act 1991.

(3) The conditions referred to in subsection (2)(c) above are that—

(a) the vehicle is used, or intended for use, by a handicapped person in receipt of a disability living allowance by virtue of entitlement to the mobility component or of a mobility supplement,

(b) the insured lets such vehicles on hire to such persons in the course of a business consisting predominantly of the provision of motor vehicles to such persons, and

(c) the insured does not in the course of the business let such vehicles on hire to such persons on terms other than qualifying terms.

(4) For the purposes of subsection (3)(c) above a vehicle is let on qualifying terms to a person (the lessee) if the consideration for the letting consists wholly or partly of sums paid to the insured by—

(a) the Department of Social Security,

(b) the Department of Health and Social Services for Northern Ireland, or

(c) the Ministry of Defence,

on behalf of the lessee in respect of the disability living allowance or mobility supplement to which the lessee is entitled.

(5) For the purposes of subsection (2)(d) and (e) above the relevant classes are classes 1, 6 and 12 of the classes specified in Part I of Schedule 2 to the [1982 c. 50.] Insurance Companies Act 1982 (ships, accident, third-party etc.).

(6) For the purposes of subsection (2)(g) above the relevant classes are classes 1, 5 and 11 of the classes specified in Part I of Schedule 2 to the Insurance Companies Act 1982 (aircraft, accident, third-party etc.).

(7) In deciding whether a contract relates to lifeboat equipment the nature of the risks concerned is immaterial, and they may (for example) be risks of dying or sustaining injury or of loss or damage.

(8) For the purposes of subsection (2)(l) above relevant supplies are—

(a) any supply of goods where the supply is to be made outside the United Kingdom or where the goods are to be exported from the United Kingdom;

(b) any supply of services where the services are to be performed outside the United Kingdom.

(9) Regulations may make provision for determining for the purposes of subsection (8) above—

(a) the place where a supply of goods is to be regarded as made;

(b) the place where services are to be regarded as performed.

(10) For the purposes of this section—

(a) “handicapped” means chronically sick or disabled;

(b) “disability living allowance” means a disability living allowance within the meaning of section 71 of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 or section 71 of the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992;

(c) “mobility supplement” means a mobility supplement within the meaning of article 26A of the [S.I. 1983/883.] Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, article 25A of the [S.I. 1983/686.] Personal Injuries (Civilians) Scheme 1983, article 3 of the [S.I. 1985/722.] Motor Vehicles (Exemption from Vehicles Excise Duty) Order 1985 or article 3 of the [S.I. 1985/723.] Motor Vehicles (Exemption from Vehicles Excise Duty) (Northern Ireland) Order 1985.

(11) This section has effect subject to section 71 below.

(12) This section and section 71 below have effect for the purposes of this Part.