Part 7Income tax, corporation tax and capital gains tax: general
Life insurance and pensions
172Charges under life insurance policies for exceptional risk of disability
1
In Schedule 15 to the Taxes Act 1988 (provisions for determining whether an insurance policy is a “qualifying policy”)—
a
in paragraph 12(a) (disregard of so much of premium as is charged on the grounds of exceptional risk of death), and
b
in paragraph 12(b) (disregard of provision in policy charging, on those grounds, a sum as a debt against capital sum guaranteed on death),
after “death” insert “
or disability
”
.
2
Accordingly, in the heading before paragraph 12 of that Schedule, for “mortality risk” substitute “
risk of death or disability
”
.
3
In paragraph 3 of that Schedule (friendly society policies), omit paragraphs (b)(iii) and (c) of sub-paragraph (8) (which make provision corresponding to paragraph 12(a) and (b) but are unnecessary).
4
In paragraph 18 of that Schedule (rules about substituted policies applied where policies are varied) insert after sub-paragraph (3)—
4
For the purposes of this paragraph there is no variation in the terms of a policy where—
a
an amount of premium chargeable on the grounds that an exceptional risk of death or disability is involved becomes or ceases to be payable, or
b
the policy is amended by the insertion, variation or removal of a provision under which, on those grounds, any sum may become chargeable as a debt against the capital sum guaranteed by the policy on death or disability.
5
In section 460 of that Act (registered friendly societies: exemption from tax in respect of life or endowment business), in subsection (3)(b)
(which makes provision corresponding to paragraph 12(a) of Schedule 15) after “death” insert “
or disability
”
.
6
The amendments made by this section shall be deemed always to have had effect; but this section shall be disregarded to the extent that it would prevent a policy from being a qualifying policy at any time before 9th April 2003.