These were the forerunner of personal pension plans (
IHTM17022). Retirement annuity
contracts were annuity policies sold by insurance companies to
individuals who were not members of an occupational or company (
IHTM17021) pension scheme. Since most
of those individuals were self-employed they were often referred to
as self-employed retirement annuities.
Contributions to those contracts enjoy relief from income
tax. This relief was originally granted under FA59/S22 and later
under ICTA70/S226. For that reason the annuities were also known as
S22 or S226 annuities.
Under the original legislation the death benefits (
IHTM17030) under these policies could
not be written in trust so that on the member’s death in
service the lump sum death benefit was payable to the estate and so
liable to Inheritance Tax. As from 6 April 1980 the member could
assign the death benefits on trust.
It ceased to be possible to take out new retirement annuity
contracts on or after 4 January 1988. However, it is possible to
make additional contributions to contracts effected before that
date.
If the policy is a retirement annuity contract the policy
provisions and possibly also the policy schedule will include a
clear reference to either FA56/S22 or ICTA70/S226.
