SCHEDULES
C1C2SCHEDULE 15 QUALIFYING POLICIES
Sch. 15 modified (1.5.1995) by Finance Act 1995 (c. 4), Sch. 10 para. 4(2)(3)
F1PART A1Premium limit for qualifying policies
Sch. 15 Pt. A1 inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 9 para. 2
Restricted relief qualifying policies
A2
1
Sub-paragraph (2) applies if—
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.
Sch. 15 modified by Finance Act 1991 (c. 31, SIF 63:1), s. 50, Sch. 9 para. 5 (2)