Income Tax (Trading and Other Income) Act 2005 section 474

Special rules: qualifying policies

Section 474 sets out special rules that apply when the gains on life insurance policies rules in this chapter are applied to qualifying policies, and explains when certain foreign life insurance policies lose their qualifying status.

• Qualifying policies are life insurance policies that meet the conditions in Schedule 15 to ICTA and receive special tax treatment; several other sections contain detailed rules that apply specifically to these policies.
• Foreign life insurance policies that would otherwise be qualifying policies lose that status in two specific circumstances relating to non-UK insurers and overseas life assurance business.
• A policy issued by a non-UK resident insurer loses qualifying status once it ceases to form part of business conducted through the insurer's UK permanent establishment (i.e. the conditions in paragraph 24(3) of Schedule 15 to ICTA are no longer met).
• A policy forming part of the overseas life assurance business of a UK-operating insurer (broadly, a policy held by a non-UK resident policyholder) is not treated as a qualifying policy in relation to any chargeable event that occurs.