(1)In section 72 of the M1Finance Act 1994 (interpretation: premium) after subsection (1) there shall be inserted—
“(1A)Where an amount is charged to the insured by any person in connection with a taxable insurance contract, any payment in respect of that amount is to be regarded as a payment received under that contract by the insurer unless—
(a)the payment is chargeable to tax at the higher rate by virtue of section 52A above; or
(b)the amount is charged under a separate contract and is identified in writing to the insured as a separate amount so charged.”
(2)The amendment made by subsection (1) above has effect in relation to payments received in respect of amounts charged on or after 1st April 1997.