The "connected contract" exclusion at
EIM30513 is essentially an
anti-avoidance provision to prevent value shifting from a
non-qualifying contract that may or may not be a contract of
insurance to a qualifying contract of insurance. However, it does
not operate to disqualify an insurance contract merely because that
contract is connected with an ordinary contract of employment.
For this purpose a contract is connected with another contract if:
For example, a number of companies in a group may together take out policies that are otherwise qualifying contracts of insurance at premiums of, say, £900 each. But because the policies are identical and are entered into as part of a single transaction the premium £900 incorporates a discount of 10 per cent on the premium that would have been charged if the policies had been taken out separately. Although the contracts are all connected with one another exclusion in the second bullet above does not apply and they remain qualifying.