Income Tax (Trading and Other Income) Act 2005

[F1 463A Restricted relief qualifying policies: disapplication of section 485 etc U.K.

(1) This section applies for the purpose of determining if an individual is liable for tax charged under this Chapter.

(2) In relation to an event occurring on or after 6 April 2013, section 485 (disregard of certain events in relation to qualifying policies) does not apply in relation to a policy (“policy X”) which is a restricted relief qualifying policy (see paragraph A2 of Schedule 15 to ICTA).

(3) If an individual is liable for tax charged under this Chapter as a result of subsection (2), the gain on which the tax is charged in the case of the individual is reduced by the following amount—

where—

G is the amount of the gain (apart from this subsection),

TAP is the total amount of premiums payable under policy X during the policy X period so far as they are allowable premiums as determined in accordance with section 463B, and

TP is the total amount of premiums payable under policy X during the policy X period.

(4) If section 528 also applies in the case of the individual in relation to the gain, subsection (3) is to be applied to the gain before section 528 and, accordingly, the reduction to be made under section 528 is to be determined by reference to the gain as reduced by subsection (3).

(5) The following subsections apply for the purposes of this section (except subsection (2)) and section 463B.

(6) “The policy X period” means the period for which policy X has run before the chargeable event occurs.

(7) Subsections (8) and (9) apply if policy X is a new policy in relation to another policy.

(8) For the purposes of subsection (6) policy X is to be taken to have run—

(a) from the issue of the other policy, or

(b) if the other policy was also a new policy in relation to an earlier policy, from the issue of the earlier policy,

and so on.

(9) References to premiums payable under policy X are to be read as including references to premiums payable under any earlier policy taken into account under subsection (8).

(10) The following are to be left out of account in determining the premiums payable under a policy—

(a) so much of a premium as is charged on the grounds that an exceptional risk of death or disability is involved;

(b) subject to subsection (11), so much of the first premium payable the liability for the payment of which—

(i) is discharged in accordance with paragraph 15(2) of Schedule 15 to ICTA, or

(ii) in the case of a policy in relation to which paragraph 3 of that Schedule applies, is discharged under a provision of the policy falling within paragraph 3(4)(c) of that Schedule.

(11) The maximum amount that may be left out of account under subsection (10)(b) in the case of a policy is—

where N is the number of complete years for which ran—

a

the other policy involved, or

b

if there is more than one other policy involved, the policy which ran for the most number of complete years.

(12) In determining the premiums payable under a policy any provision for the waiver of premiums by reason of a person's disability is to be ignored.

(13) “New policy” has the meaning given in paragraph 17 of Schedule 15 to ICTA.]

Textual Amendments

F1 Ss. 463A-463E inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 9 para. 8