Income Tax (Trading and Other Income) Act 2005 section 478

Exclusion of mortgage repayment policies

Section 478 excludes mortgage repayment policies from the rules in this chapter that apply to gains from life insurance policies.

• A mortgage repayment policy is a life insurance policy whose sole purpose is to pay off a repayment mortgage on death or disability
• The sum payable under the policy must be substantially the same as the amount then outstanding on the mortgage
• The mortgage may relate to the individual's home or to premises used for their business
• A repayment mortgage is one where the principal is repaid by instalments at least annually