Income Tax (Trading and Other Income) Act 2005 section 113

Certain pre-23rd March 1999 policies not foreign capital redemption policies

Section 113 sets out the conditions under which a capital redemption policy taken out before 23rd March 1999 can be classified as a "foreign capital redemption policy" for the purposes of the rules on gains from life insurance contracts and similar policies.

• A capital redemption policy made before 23rd March 1999 is only treated as a "foreign capital redemption policy" if it satisfies two specific conditions
• The policy must fall within the definition of a foreign capital redemption policy as set out in section 476(3)(a)
• The policy must not be excluded by paragraph 104, which prevents certain policies made before 23rd February 1984 from being classified as foreign capital redemption policies
• Both conditions must be met — if either fails, the policy will not be treated as a foreign capital redemption policy and the special tax rules for such policies will not apply