SCHEDULES
SCHEDULE 2

Transitionals and savings etc.
Part 6

Savings and investment income: insurance contracts and policies made before certain dates

Certain pre-26th June 1982 policies and contracts excluded from Chapter 9 of Part 4
102
1
Chapter 9 of Part 4 does not apply to a pre-1982 assigned policy or contract unless on a date after 23rd August 1982 it has met condition A, B or C.
2
In sub-paragraph (1) “pre-1982 assigned policy or contract” means—
a
a policy of life insurance issued in respect of an insurance made before 26th June 1982, or
b
a contract for a life annuity made before that date,
the rights under which were assigned for money or money's worth before that date and are not held by the original beneficial owner.
3
Condition A is that the rights under the policy or contract are again assigned for money or money's worth.
4
Condition B is that a payment is made under the policy or contract by way of premium.
5
Condition C is that a sum is lent—
a
by, or by arrangement with, the body issuing the policy or the body with which the contract was made, and
b
to or at the direction of an individual falling within sub-paragraph (6).
6
An individual falls within this sub-paragraph at any time if—
a
were a gain to arise in respect of the policy or contract at that time the individual—
i
would be liable for tax in respect of it as a result of section 465 (person liable: individuals), or
ii
would be so liable apart from the requirement in section 465(1) that the individual must be UK resident in the tax year in which the gain arises, or
b
at that time the rights under the policy or contract are held on charitable trusts created by the individual.
7
In the case of a qualifying policy, condition C is not met if—
a
interest is payable on the loan at a commercial rate, or
b
the loan is to a full-time employee of the body to assist the employee in purchasing or improving a dwelling to be used as the employee's only or main residence.
8
In the case of a policy issued in respect of an insurance made before 27th March 1974 or a contract made before that date, this paragraph applies as if sub-paragraph (1) did not refer to condition C.
9
A loan which causes condition C to be met is treated for the purposes of sections 500(c) and 501 (loans treated as part surrenders) as having been made at a time when Chapter 9 of Part 4 does apply to gains on the policy or contract.