RPSM05101235 - Technical Pages: Contributions and tax relief: Member contributions: Entitlement to tax relief: Protected policies under occupational schemes
Protected non-group life policies under an occupational pension scheme
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| [Paras 6 & 7, Sch 18 FA07] |
The normal rule that life assurance premium contributions cannot receive tax relief does not apply where the non-group life policy (personal term assurance policy) is a protected policy.
Protected policies under an occupational pension scheme
Unless it has been varied, see below, a non-group life policy held for the purposes of an occupational pension scheme is a protected policy if it is
- issued in respect of insurances made and became held for the
purposes of that
registered pension scheme before 21 March 2007, or
- issued in respect of insurances made and became held for the purposes of that registered pension scheme after 20 March 2007 but before 1 August 2007 where
- the insurer received the application for the policy before 29 March 2007, and
- the amount and term of the payable benefits under the issued policy are no greater than as set out in the application to the insurer, or
- to replace a policy that was previously in existence but had subsequently lapsed, and
- the new policy is made on the same terms and conditions as the lapsed policy;
- the new policy was merely re-instated and was not the subject of a new insurance proposal;
- the lapsed policy would have been eligible for relief had it stayed in force (i.e. it was a “protected policy” under the legislation); and
- the new policy is made and held within the pension scheme before 1 August 2007.
Variations to a protected policy
A protected policy will cease to be protected only if there is a variation to the policy terms which
- increases the benefits payable under the policy or
- extends the period during which benefits are payable.
Where the policy was issued in respect of insurances made before
21 March 2007 only variations made after 20 March 2007 can cause
loss of protected status.
RPSM05101245 has more information on
what does and does not constitute a policy variation.
A change to the policy terms that is needed to comply with
either
- The Employment Equality (Age) Regulations 2006 [SI 2006/1031] or
- The Employment Equality (Age) Regulations (Northern Ireland) 2006 [SR 2006/261].
will not cause loss of protected policy status.
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| Glossary ( RPSM20000000) |
