Income Tax (Trading and Other Income) Act 2005 section 480

Exclusion of excepted group life policies

Section 480 excludes certain group life insurance policies from the rules in Chapter 9 that tax gains on life insurance contracts, provided those policies meet specific conditions about the benefits they pay and the people intended to benefit.

• A group life policy is one that pays out death benefits in respect of more than one individual, with benefits payable on the death of each of those individuals
• An excepted group life policy is a group life policy that meets the conditions set out in sections 481 (about benefits) and 482 (about persons intended to benefit)
• Where a group life policy qualifies as an excepted group life policy, Chapter 9 does not apply, meaning individual deaths under the policy do not trigger taxable chargeable events
• Typical examples include policies taken out for members of trade unions, professional associations and partnerships, which pay out successively as each insured life dies