Part 2

Anti-avoidance and revenue protection

Value added tax and insurance premium tax

Insurance premium tax: separate contracts
51
1
Part 3 of FA 1994 (insurance premium tax) is amended as follows.
2
Section 72 (meaning of “premium”) is amended as follows.
3
After subsection (1A) insert—
1AA
A contract (“the relevant contract”) is not to be regarded as a separate contract for the purposes of subsection (1A) above if conditions A to D are met.
1AB
Condition A is that the insured is an individual (“I”) and enters into the taxable insurance contract in a personal capacity.
1AC
Condition B is that I—
a
is required to enter into the relevant contract by, or as a condition of entering into, the taxable insurance contract, or
b
would be unlikely to enter into the relevant contract without also entering into the taxable insurance contract.
1AD
Condition C is that—
a
the amount charged to I under the relevant contract in respect of any particular services is not open to negotiation by I, or
b
the other terms on which particular services are to be provided to I under the relevant contract are not open to such negotiation.
1AE
Condition D is that the amount charged to I under the taxable insurance contract is arrived at without a comprehensive assessment having been undertaken of the individual circumstances of I which might affect the level of risk.
4
After subsection (9) insert—
9A
Provision may be made by order amending subsections (1AA) to (1AE) above.
5
In section 74(4) and (6) (orders which need to be approved by House of Commons), for “or 71” substitute “ , 71 or 72 ”.
6
The amendment made by subsection (3) has effect in relation to payments made on or after 24 March 2010.