Income Tax (Earnings and Pensions) Act 2003 section 350

Connected contracts

Section 350 sets out the rules for determining whether two insurance contracts are "connected" for the purposes of the qualifying insurance contract rules in section 349, and identifies circumstances where a connection between contracts can be disregarded.

• Two insurance contracts are connected if one was entered into by reference to the other or to facilitate entry into the other on particular terms, and the terms of one contract are significantly different from what they would have been without the other contract.
• These conditions (known as Conditions E and F) must both be met either when both contracts first come into force or at any later time.
• Where there is only one significant difference in terms and the contracts otherwise meet the qualifying conditions (Conditions A, B and C in section 349), the difference can be disregarded if it is a premium reduction attributable solely to a right to renew or to the contract being a renewal.
• The difference can also be disregarded where multiple contracts form part of a single transaction and the premium reductions are attributable solely to each contract's premium being set as the appropriate proportion of the combined premium that would apply to a single contract covering all the risks.