Search Legislation

Income and Corporation Taxes Act 1988

 Help about what version

What Version

  • Latest available (Revised)
  • Original (As enacted)
 Help about advanced features

Advanced Features

Changes over time for: PART A1

 Help about opening options

Alternative versions:

Changes to legislation:

Income and Corporation Taxes Act 1988, PART A1 is up to date with all changes known to be in force on or before 19 March 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.

View outstanding changes

Changes and effects yet to be applied to the whole Act associated Parts and Chapters:

Whole provisions yet to be inserted into this Act (including any effects on those provisions):

  • s. 109A(4B) inserted by 2005 c. 7 Sch. 4 para. 6(3) (This amendment not applied to legislation.gov.uk. The amending provision (2005 c. 7, Sch. 4 para. 6) repealed retrospectively by 2005 c. 22, Sch. 6 para. 4(1)(6))
  • Sch. 19AB para. 5(5)(a)(b) words substituted by S.I. 2001/3629 art. 52(2)(n) (This amendment not applied to legislation.gov.uk. The words to be substituted do not occur in Sch. 19AB para. 5)

[F1PART A1 U.K.Premium limit for qualifying policies

Textual Amendments

Premium limit for qualifying policies to apply from 6 April 2013U.K.

A1(1)Sub-paragraph (2) applies if—U.K.

(a)an event falling within sub-paragraph (3) occurs,

(b)apart from sub-paragraph (2), the policy to which the event relates would be a qualifying policy after the event, and

(c)an individual who is a beneficiary under that policy is in breach of the premium limit for qualifying policies.

(2)That policy is not to be a qualifying policy after the event.

(3)The events falling within this sub-paragraph are—

(a)the issue of a policy in respect of an insurance made on or after 6 April 2013;

(b)the variation of a policy on or after 6 April 2013 where as a result of the variation—

(i)the period over which premiums are payable under the policy is or could be lengthened, or

(ii)the total amount of the premiums payable under the policy in any relevant period is or could be increased,

or both;

(c)the assignment on or after 6 April 2013 of any rights, or any share in any rights, under a policy where the assignment falls within paragraph B2(3)(c) to (g) or (5) below;

(d)a deceased beneficiary event on or after 6 April 2013;

(e)the conditions in paragraph 24(3) below being fulfilled for the first time in respect of a new non-resident policy where—

(i)the conditions are fulfilled for the first time on or after 6 April 2013, and

(ii)but for the conditions being fulfilled, the policy could not be a qualifying policy because of paragraph 24(2).

(4)An event does not fall within sub-paragraph (3) if—

(a)the policy to which the event relates is—

(i)a protected policy,

(ii)a restricted relief qualifying policy, or

(iii)a pure protection policy,

(b)the event is the issue of a policy which is a new policy in relation to an earlier policy where—

(i)the new policy is issued in substitution for the earlier policy (and not on its maturity), and

(ii)the life assured under the new policy is different to the life assured under the earlier policy but that is the only difference to what the position would have been had the earlier policy continued to run,

(c)paragraph 20ZA below applies to a policy and the event is the reinstatement or replacement of the policy as mentioned in paragraph 20ZA(4),

(d)the event is the issue or variation of a policy in relation to which paragraph 29 of Schedule 39 to the Finance Act 2012 applies, or

(e)the event is an assignment falling within paragraph B2(3)(e) below where the assignment is a mortgage endowment assignment.

(5)In sub-paragraph (3)(b)(ii) “relevant period” means any period of 12 months beginning at or after the time of the variation.

(6)A variation is to be ignored for the purposes of sub-paragraph (3)(b) if its effect is nullified before the end of the period of 3 months after the day on which the variation occurs.

(7)Sub-paragraph (4)(a)(i) does not apply in the case of an event mentioned in sub-paragraph (3)(e).

(8)Sub-paragraph (4)(a)(ii) does not apply in the case of—

(a)an event mentioned in sub-paragraph (3)(c) or (d) occurring in relation to a restricted relief qualifying policy (“the assigned policy”),

(b)any subsequent event relating to the assigned policy, or

(c)any event relating to—

(i)a later policy which is a new policy in relation to the assigned policy, or

(ii)any policy which is a new policy in relation to the later policy,

and so on.

(9)In the case of an event mentioned in sub-paragraph (3)(b), sub-paragraph (4)(a)(iii) applies only if the policy is a pure protection policy both before and after the variation.

(10)This paragraph is to be applied after all other provisions of this Schedule relevant to the question of whether a policy is a qualifying policy after an event have been applied.

Restricted relief qualifying policiesU.K.

A2(1)Sub-paragraph (2) applies if—U.K.

(a)an event falling within sub-paragraph (3) occurs,

(b)the policy to which the event relates is a qualifying policy after the event, and

(c)an individual who is a beneficiary under that policy is in breach of the premium limit for qualifying policies.

(2)That policy is to be a restricted relief qualifying policy after the event.

(3)The events falling within this sub-paragraph are—

(a)a premium limit event in relation to a protected policy on or after 21 March 2012;

(b)the issue of a policy as mentioned in paragraph A4(2)(b) below if, assuming that the substitution of the protected policy were instead a variation of that policy, there would be a premium limit event in relation to that policy;

(c)the assignment on or after 6 April 2013 of any rights, or any share in any rights, under a protected policy where the assignment falls within paragraph B2(3)(c) to (g) or (5) below;

(d)a deceased beneficiary event on or after 6 April 2013 where the policy in question is a protected policy;

(e)the issue of a policy in respect of an insurance made on or after 21 March 2012 but before 6 April 2013 otherwise than as mentioned in paragraph A4(2)(b) below;

(f)the variation of a policy, other than a protected policy, on or after 21 March 2012 but before 6 April 2013 where as a result of the variation—

(i)the period over which premiums are payable under the policy is or could be lengthened, or

(ii)the total amount of the premiums payable under the policy in any relevant period is or could be increased,

or both;

(g)the conditions in either sub-paragraph (3) or sub-paragraph (4) of paragraph 24 below being fulfilled for the first time in respect of a new non-resident policy where—

(i)the conditions are fulfilled for the first time on or after 21 March 2012 but before 6 April 2013, and

(ii)but for the conditions being fulfilled, the policy could not be a qualifying policy because of sub-paragraph (2) of paragraph 24.

(4)An event does not fall within sub-paragraph (3) if—

(a)the policy to which the event relates is a pure protection policy,

(b)the event is the issue of a policy which is a new policy in relation to an earlier policy where—

(i)the new policy is issued in substitution for the earlier policy (and not on its maturity), and

(ii)the life assured under the new policy is different to the life assured under the earlier policy but that is the only difference to what the position would have been had the earlier policy continued to run,

(c)paragraph 20ZA below applies to a policy and the event is the reinstatement or replacement of the policy as mentioned in paragraph 20ZA(4),

(d)the event is the issue or variation of a policy in relation to which paragraph 29 of Schedule 39 to the Finance Act 2012 applies, or

(e)the event is an assignment falling within paragraph B2(3)(e) below where the assignment is a mortgage endowment assignment.

(5)In sub-paragraph (3)(f)(ii) “relevant period” means any period of 12 months beginning at or after the time of the variation.

(6)A premium limit event or a variation is to be ignored for the purposes of sub-paragraph (3)(a) or (f) if its effect is nullified before 6 July 2013.

(7)In the case of a premium limit event which occurs on or after 6 April 2013, in sub-paragraph (6) the reference to 6 July 2013 is to be read as a reference to the end of the period of 3 months after the day on which the premium limit event occurs.

(8)In the case of an event mentioned in sub-paragraph (3)(a) or (f), sub-paragraph (4)(a) applies only if the policy is a pure protection policy both before and after the premium limit event or variation.

(9)A “premium limit event” occurs in relation to a protected policy if—

(a)the policy is varied or a relevant option is exercised so as to change the terms of the policy, and

(b)as a result of the variation or exercise of the relevant option—

(i)the period over which premiums are payable under the policy is or could be lengthened, or

(ii)the total amount of the premiums payable under the policy in any relevant period is or could be increased,

or both.

(10)A “premium limit event” also occurs in relation to a protected policy if on or after 6 April 2013—

(a)the policy is varied or a relevant option is exercised so as to change the terms of the policy, and

(b)as a result of the variation or exercise of the relevant option—

(i)the period over which premiums are payable under the policy is or could be shortened, or

(ii)the total amount of the premiums payable under the policy in any relevant period is or could be decreased,

or both.

(11)In sub-paragraphs (9)(b)(ii) and (10)(b)(ii) “relevant period” means any period of 12 months beginning at or after the time of the variation or exercise of the relevant option.

(12)The variation of, or exercise of a relevant option under, a protected policy is not a premium limit event in relation to the policy if—

(a)the policy secures a capital sum payable either—

(i)on survival for a specified term, or

(ii)on earlier death or on earlier death or disability,

(b)the policy is issued and maintained for the sole purpose of ensuring that the borrower under an interest-only mortgage will have sufficient funds to repay the principal lent under the mortgage, and

(c)the policy is varied, or the relevant option is exercised, for that sole purpose.

(13)In sub-paragraph (3)(g) references to paragraph 24 below are to that paragraph as it has effect before the appointed date for the purposes of section 55 of the Finance Act 1995.

(14)A qualifying policy which is a new policy in relation to an earlier policy is a restricted relief qualifying policy if the earlier policy is a restricted relief qualifying policy.

(15)A policy which is a restricted relief qualifying policy remains a restricted relief qualifying policy so long as it is a qualifying policy.

(16)Paragraph A1 above is to be ignored in determining for the purposes of sub-paragraph (14) or (15) if a policy is a qualifying policy. This is subject to paragraph A1(8).

(17)For further provision about restricted relief qualifying policies, see sections 463A to 463D of ITTOIA 2005.

The premium limit for qualifying policiesU.K.

A3(1)For the purposes of paragraphs A1(1)(c) and A2(1)(c) above an individual is in breach of the premium limit for qualifying policies if the total amount of the premiums payable under relevant policies in any relevant period—U.K.

(a)exceeds £3,600, or

(b)could exceed £3,600 as a result of—

(i)the exercise of any one or more relevant options conferred by one or more relevant policies, or

(ii)so far as not covered by sub-paragraph (i), the application of one or more terms of one or more relevant policies relating to increases in premiums.

(2)For the purposes of sub-paragraph (1)—

(a)so much of a premium payable under a relevant policy as is charged on the grounds that an exceptional risk of death or disability is involved is to be left out of account in determining the premiums payable under the policy,

(b)so much of the first premium payable under a relevant policy the liability for the payment of which—

(i)is discharged in accordance with paragraph 15(2) below, or

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

is to be left out of account in determining the premiums payable under the policy (subject to sub-paragraph (3) below),

(c)in determining the premiums payable under a relevant policy any provision for the waiver of premiums by reason of a person's disability is to be ignored, and

(d)relevant period” means any period of 12 months beginning at or after the time when the event falling within paragraph A1(3) or A2(3) above (“the relevant event”) occurs.

(3)The maximum amount that may be left out of account under sub-paragraph (2)(b) in the case of a relevant 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.

(4)For the purposes of this paragraph the following are “relevant policies”—

(a)the policy to which the relevant event relates, and

(b)any other policy—

(i)which is a qualifying policy, and

(ii)under which the individual is a beneficiary.

(5)But neither a protected policy nor a pure protection policy is to be a relevant policy by virtue of sub-paragraph (4)(b).

(6)Sub-paragraph (7) applies if this paragraph is to be applied in the case of an individual in consequence of two or more events occurring at the same time (including where one or more of the events falls within paragraph A1(3) above and one or more of the events falls within paragraph A2(3) above).

(7)For the purpose of applying this paragraph in the case of the individual in consequence of any of the events, sub-paragraph (4)(a) has effect as if the reference to the policy to which the relevant event relates were a reference to all the policies to which the events, taken together, relate.

(8)But sub-paragraph (7) does not apply, and sub-paragraph (9) applies instead, if—

(a)all the policies in question are policies issued by the same issuer, and

(b)each of them has an unique identifier in a series of unique identifiers which the issuer gives to policies issued by it.

(9)For the purpose of applying this paragraph in the case of the individual in consequence of any of the events, an event relating to a policy (“policy A”) is treated as occurring before an event relating to another policy (“policy B”) if, in the issuer's series of unique identifiers, policy A's unique identifier comes before policy B's unique identifier.

Protected policiesU.K.

A4(1)This paragraph applies for the purposes of this Part of this Schedule.U.K.

(2)A policy is “protected” if—

(a)it is issued in respect of an insurance made before 21 March 2012, or

(b)it is issued in respect of an insurance made on or after 21 March 2012 where—

(i)it is a new policy in relation to an earlier policy,

(ii)it is issued in substitution for the earlier policy (and not on its maturity), and

(iii)the earlier policy is a protected policy (whether by virtue of paragraph (a) or this paragraph).

(3)A policy which is protected ceases to be protected if it becomes a restricted relief qualifying policy.

(4)A policy issued as mentioned in sub-paragraph (2)(b) is not protected if—

(a)its issue is an event falling within paragraph A2(3) above, and

(b)after that event it is a restricted relief qualifying policy.

How to determine if an individual is a beneficiary under a policyU.K.

A5(1)This paragraph applies for the purposes of this Part of this Schedule in determining if an individual is a beneficiary under a policy.U.K.

(2)An individual is a beneficiary under a policy if the individual beneficially owns—

(a)any rights under the policy, or

(b)any share in any rights under the policy.

(3)An individual is a beneficiary under a policy if—

(a)any rights under the policy are, or any share in any rights under the policy is, held on non-charitable trusts created by the individual, and

(b)those rights are, or that share is, not beneficially owned by any individual.

(4)The following provisions of ITTOIA 2005 apply for the purposes of sub-paragraph (3)(a)—

(a)section 465(6), and

(b)the definition of “non-charitable trust” in section 545(1).

(5)An individual is a beneficiary under a policy if—

(a)any rights under the policy are, or any share in any rights under the policy is, held as security for a debt of the individual, and

(b)those rights are, or that share is, not beneficially owned by any individual.

Further definitionsU.K.

A6(1)In this Part of this Schedule—U.K.

(a)new policy” has the meaning given in paragraph 17 below,

(b)references to the variation of a policy are to a variation in relation to which paragraph 18 below applies,

(c)pure protection policy” means a policy—

(i)which has no surrender value and is not capable of acquiring a surrender value, or

(ii)under which the benefits payable cannot exceed the amount of the premiums paid except on death or in respect of disability, and

(d)relevant option”, in relation to a policy, means an option conferred by the policy on the person to whom it is issued to have another policy substituted for it or to have any of its terms changed.

(2)For the purposes of this Part of this Schedule a “deceased beneficiary event” occurs if, in connection with the death of an individual (“D”) who was a beneficiary under a policy, an individual (“B”) becomes a beneficiary under that policy by reference (wholly or partly) to any rights, or to any share in any rights, by reference to which D was a beneficiary (wholly or partly).

For this purpose, it does not matter if B is already a beneficiary under the policy.

(3)For the purposes of this Part of this Schedule an assignment is a “mortgage endowment assignment” if—

(a)the policy to which the assignment relates secures a capital sum payable either—

(i)on survival for a specified term, or

(ii)on earlier death or on earlier death or disability,

(b)the policy is issued and maintained for the sole purpose of ensuring that the borrower under an interest-only mortgage will have sufficient funds to repay the principal lent under the mortgage, and

(c)when the assignment occurs, it is intended that the policy will continue to be maintained for that sole purpose.]

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources