Income Tax (Trading and Other Income) Act 2005 section 475

Special rules: personal portfolio bonds

Section 475 introduces the special rules that apply to personal portfolio bonds within the chargeable events framework for life insurance contracts and similar policies.

• Personal portfolio bonds are subject to additional special rules beyond those applying to ordinary life insurance policies and capital redemption policies.
• An annual calculation must be carried out each year for personal portfolio bonds, which is not required for standard policies.
• Specific methods are prescribed for performing these annual calculations, and a chargeable event arises whenever the calculation shows a gain.
• The definition of what qualifies as a personal portfolio bond is set out separately and must be consulted to determine whether these special rules apply.