Exclusion of certain types of insurance from paragraph 2 of Schedule 6A to the Finance Act 1994

2.—(1) Paragraph 2 (insurance contracts relating to motor cars or motor cycles) of Schedule 6A(1) to the Finance Act 1994 is amended as follows.

(2) After sub-paragraph (2) insert—

“(2A) A premium does not fall within this paragraph if it is—

(a) payable under a taxable insurance contract relating to a motor car or motor cycle which is supplied by way of sale, and

(b) attributable to cover of the kind generally known as—

(i) fully comprehensive,

(ii) third party, fire and theft, or

(iii) third party.”.

(3) In sub-paragraph (6), after the definitions of “motor car” and “motor cycle” insert—

““sale”, in relation to a motor car or motor cycle, means—

(a)

a sale under which title to the motor car or motor cycle passes to the purchaser immediately on purchase, or

(b)

a sale pursuant to a hire purchase agreement (within the meaning of the Consumer Credit Act 1974(2)) under which it is intended at the outset of the agreement that the title to the motor car or motor cycle is to pass to the purchaser, whether on conclusion of the agreement or at the end of a period specified in the agreement.”.

(1)

Schedule 6A was inserted by section 22(3) of, and Schedule 4 to, the Finance Act 1997.

(2)

1974 c. 39. Section 189 defines “hire purchase agreement”.