Income Tax (Trading and Other Income) Act 2005 section 743

Policies for the benefit of others who contribute to premiums

Section 743 deals with situations where one person takes out a health or employment insurance policy for the benefit of another person, and that other person contributes towards the premiums, potentially allowing them to be treated as the insured for tax exemption purposes.

• Where person A takes out an insurance policy wholly or partly for the benefit of person B, and B contributes towards the premiums, B may be treated as the insured for tax purposes.
• This treatment applies to the extent that annual payments under the policy are attributable, on a just and reasonable basis, to B's premium contributions.
• Where B is treated as the insured, only B's own premium contributions are considered when determining whether the tax exemption conditions are met.
• Contributions made by anyone other than B are ignored when assessing whether any part of the premiums was deductible in calculating the insured person's income.