Income Tax (Trading and Other Income) Act 2005 section 123

The second selection condition

Section 123 sets out the three cumulative conditions (A, B and C) that must all be met for a life insurance policy or capital redemption contract to satisfy the "second selection condition" relevant to the personal portfolio bond rules.

• Condition A requires that, at some point from 6 April 1994 onwards, the policy or contract terms allowed benefits to be linked to a non-permitted index or non-permitted property
• Condition B requires that, despite this theoretical possibility, the benefits were never actually determined by reference to such a non-permitted index or non-permitted property during that period
• Condition C requires that the policy or contract terms were varied before the end of the first insurance year beginning on or after 6 April 1999, so that from then on only permitted indices and permitted property could be selected
• Condition C is subject to modification where a policyholder was not UK resident on 17 March 1998 but has since become UK resident