IPTM4360 - Purchased life annuities: partial exemption scheme: procedure relating to part C of form PLA6

There are three questions at Part C of form PLA6 designed to test whether the annuity is a purchased life annuity within the partial exemption scheme rather than within the exceptions mentioned at IPTM4220. If the answer to any of these questions is ‘yes’, the insurer must not calculate an exempt capital element.

In these circumstances the insurer may want to ask the annuitant why they answered yes to the question and if it seems that the annuitant has misunderstood, and that the annuity is not barred from the exemption then the insurer should send a new form PLA6 to the annuitant for completion or ask the annuitant to amend the original form.

If the correct answer to one or more of the questions is yes then the exceptions do apply. The insurer should use the relevant section of part C to record this and send the completed form to the annuitant.

An insurer, unless a non-UK insurer, should deduct tax from the whole of each annuity payment made until it receives the form PLA6 back from the annuitant indicating that an exempt capital amount is due. In any case where no exempt capital amount is due the insurer, unless a non-UK insurer, should deduct tax from the whole of each annuity payment. Where tax has been deducted from annuity payments, for example from the whole amount where the form PLA6 was not returned before payments commenced, then the annuitant can reclaim any tax overpaid by contacting their usual HMRC office.