Income Tax (Trading and Other Income) Act 2005 section 520

The property categories

Section 520 sets out the nine categories of property that determine whether a life insurance policy or capital redemption contract avoids classification as a personal portfolio bond.

• Nine categories of permitted property are listed, ranging from internal linked funds and authorised unit trusts to cash, UK REITs, and authorised contractual schemes — broadly covering regulated collective investments and straightforward cash holdings.
• A policy or contract that is itself a personal portfolio bond, or whose value is linked to one, or that holds one as related property, is "excluded" from Category 6 and cannot count as permitted property.
• Cash qualifies as a permitted category only if it is not acquired wholly or partly for the purpose of realising a gain on disposal — a restriction that is mainly relevant to foreign currency holdings.
• The Treasury has a regulation-making power to add, remove, or amend categories and their definitions, but any removal of a category must be approved by the House of Commons within 28 days or it ceases to have effect.