Income Tax (Trading and Other Income) Act 2005 section 521

The property selection conditions

Section 521 sets out the two property selection conditions that must be met for investment property linked to a life insurance policy or life annuity contract to avoid being treated as a personal portfolio bond.

• There are two property selection conditions: a general selection condition (available to all policyholders) and a class selection condition (available to a particular class or classes of policyholders).
• Property meets either condition if the opportunity to select property in the same category is available broadly — either to all policyholders (or their agents) or to a defined class of policyholders (or their agents).
• A group of policyholders counts as a valid "class" only if membership is not restricted to connected persons, the insurance company alone determines class membership, and the opportunity is clearly publicised in marketing material as available to any person meeting the stated criteria.
• It does not matter whether the selection opportunity is offered directly to policyholders or to persons acting on their behalf, such as financial advisers — both routes satisfy the conditions.