Income Tax (Trading and Other Income) Act 2005 section 739

Conditions to be met by policies also providing other benefits

Section 739 sets out the conditions that must be met where an insurance policy provides benefits that go beyond just health or employment risk cover, to prevent abuse of the tax exemption for health and employment insurance payments.

• These conditions only apply where a policy covers risks in addition to health or employment risk
• The policy terms relating to health or employment risk must not differ significantly from what they would be if those were the only benefits provided
• The way the health or employment terms are put into effect must also not differ significantly from how they would operate on a standalone basis
• Reductions in benefits solely because other benefits are also payable to the same person are to be disregarded when assessing whether there is a significant difference