Income Tax (Trading and Other Income) Act 2005 section 96

Pre-20th March 1968 policies and contracts excluded from Chapter 9 of Part 4

Section 96 excludes certain older life insurance policies, life annuity contracts, and capital redemption policies from the gains on insurance policies rules, based on whether they were made before 20th March 1968.

• Life insurance policies issued before 20th March 1968, life annuity contracts made before that date, and capital redemption policies contracted before that date are all outside the scope of the insurance gains rules.
• However, if a pre-20th March 1968 life insurance policy was varied on or after that date to extend its term or increase the benefits, it is treated as a new policy subject to the gains rules.
• A variation is disregarded if its sole purpose was to bring the policy into compliance with qualifying endowment policy requirements, it was made before 1st January 1969, and it did not increase the premiums payable.
• This means that genuinely old policies remain exempt, but policies that were materially changed on or after the key date lose their exemption.

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