Income Tax (Trading and Other Income) Act 2005 section 463B

Restricted relief qualifying policies: allowable premiums

Section 463B sets out the rules for determining how much of the premiums payable under a restricted relief qualifying policy (referred to as "policy X") can qualify as allowable premiums, and introduces an annual cap of £3,600 calculated by reference to premiums on related policies.

• Premiums paid before the "restricted relief date" (6 April 2013, or the later date on which the policy became a restricted relief qualifying policy) are fully allowable without limit.
• From the restricted relief date onwards, premiums are measured in annual periods and are allowable only up to a "premium limit" derived from a £3,600 annual threshold, reduced by premiums payable on related qualifying policies held by the same individual.
• If, at the time the policy became a restricted relief qualifying policy, the individual already held another restricted relief qualifying policy that was related to it, the £3,600 allowance does not apply and no post-restricted-relief-date premiums on this policy are allowable.
• An anti-avoidance rule applies to large single premiums paid between 21 March 2012 and 5 April 2013: where the next premium falls more than a month later and on or after 6 April 2013, the earlier premium is spread as a series of notional monthly premiums to prevent forestalling.