Income Tax (Trading and Other Income) Act 2005 section 479

Exclusion of pension policies

Section 479 excludes insurance policies connected with registered pension schemes from the rules in this chapter on taxation of gains from life insurance policies.

  • Insurance policies that themselves constitute a registered pension scheme are excluded from this chapter
  • Insurance policies issued or held in connection with a registered pension scheme are also excluded
  • The term "registered pension scheme" reflects the Finance Act 2004 pension rules applying from 6 April 2006
  • Transitional provisions ensured that for the 2005-06 tax year, the earlier definition of "pension policy" continued to apply

Example

ABC Ltd operates a registered pension scheme for its employees. As part of the scheme's investment arrangements, the pension trustees hold several insurance policies. Because these policies are held in connection with a registered pension scheme, they are excluded from the life insurance gains rules under section 479. Any growth in value of those policies is not subject to income tax under this chapter. Instead, the policies fall within the pension tax regime and are taxed accordingly under the rules for registered pension schemes.

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