Income Tax (Trading and Other Income) Act 2005 section 517

Policies and contracts which are not personal portfolio bonds

Section 517 sets out the circumstances in which a life insurance policy or capital redemption contract escapes classification as a personal portfolio bond, broadly where the index or property selection permitted under the policy is of a sufficiently public or unrestricted nature.

• A policy allowing index selection is not a personal portfolio bond if the index falls within a recognised category and meets specified index selection conditions
• A policy allowing property selection is not a personal portfolio bond if all selectable property falls within recognised categories and meets specified property selection conditions
• This exemption is designed to ensure that standard unit-linked policies and similar mainstream products are not caught by the personal portfolio bond rules
• The detailed definitions of qualifying index categories, property categories, and the relevant selection conditions are set out in the subsequent sections

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