RPSM05101220 - Technical Pages: Contributions and tax relief: Member contributions: Entitlement to tax relief: Personal term assurance

Contributions paid for personal term assurance

Contributions paid by or on behalf of a member to a registered pension scheme to purchase personal term assurance will not be relievable pension contributions, unless they relate to a ‘protected policy’ - see below.

Contributions for personal term assurance that cannot receive tax relief are

• contributions that are life assurance premium contributions – see RPSM05101225, and
• which are paid to an insurance company to provide death benefits under a non-group life policy– see RPSM05101230.

However certain policies are ‘protected policies’ and payment of premiums to these policies may receive tax relief. The conditions for whether or not a non-group life policy is a protected policy are different depending on whether the policy is held in respect of an occupational pension scheme or a non-occupational pension scheme.

RPSM05101235 explains when a policy held in respect of an occupational pension scheme is a protected non-group life policy.

RPSM05101240 explains when a policy held in respect of a registered pension scheme that is not an occupational pension scheme is a protected non-group life policy.

A variation in the terms of a protected non-group life policy that increases the benefits payable under the policy, or extends the period over which benefits are payable, will cause the policy to lose its protected status. As a result contributions will cease to be eligible for tax relief after the variation to the policy. RPSM05101245 gives more information on what is, or is not, a variation that would cause loss of protected status.

Any contributions paid before

• 1 August 2007 to an occupational pension scheme, or
• 6 April 2007 to a scheme that is not an occupational pension scheme

cannot be life assurance premium contributions and so can be relievable pension contributions eligible for tax relief.