Policy paper

Statement of Practice 4 (1979)

Published 28 February 1979

© Crown copyright 1979

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This publication is available at https://www.gov.uk/government/publications/statement-of-practice-4-1979/statement-of-practice-4-1979

(While not officially classed as obsolete, life insurance premium relief is no longer due on any policies taken out after 13 March 1984. Reproduced below for further information.)

The Commissioners for HM Revenue and Customs (HMRC) have considered the question of premium relief as it relates to policies effected on the lives of children in the light of the new scheme for premium relief by deduction commencing on 6 April 1979.

Relief under Section 266 Income and Corporation Taxes Act (ICTA) 1988 (formerly Section 19 ICTA 1970) is at present confined to premiums on an ‘insurance or contract….. made by (the claimant)’ and as from 6 April 1979, ‘the individual’. Where a child is of ‘tender years’ the Commissioners for HMRC consider that he cannot reasonably be regarded as having ‘made’ the insurance or contract since he would have insufficient knowledge or understanding of what he was doing. Accordingly the Commissioners for HMRC have decided that no relief is due in respect of premiums on a policy ‘taken out’ by a child of ‘tender years’. For this purpose they regard ‘tender years’ as including a child of less than 12 years of age.

In applying this ruling the Commissioners for HMRC have agreed that:

  1. Relief will be allowed by deduction on children’s policies which satisfy all the other requirements for relief and which are issued by a company within UK jurisdiction before 1 March 1979.

  2. New policies taken out on or after 1 March 1979 by a child of ‘tender years’ on his own life, will not be allowed relief whether or not the premiums are paid out of the child’s own income.

  3. Where relief is refused in respect of a policy taken out on or after 1 March 1979 by a child of ‘tender years’, it may be granted when the child reaches the age of 12 years if the insurance or contract was made before 1 September 1979.

Note: this statement is only relevant for policies still qualifying for life assurance premium relief (which was withdrawn for policies issued after 13 March 1984).

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