CG69004 - Insurance: capital redemption policies

Capital Redemption Policies are not within the charge to Capital Gains Tax. Under such a policy, on payment of a sum of money, the insurer guarantees to the insured a larger sum payable on a specified future date or dates; payment is independent of any contingency. For example, it is not dependent on a death or survival of a life. Examples of such policies include

• an annuity certain - an annuity payable for a set period not dependent on a life
• a leasehold redemption policy - which builds up a fund to be used in some way on expiration of a lease
• a sinking fund policy - this accumulates a fund for eventual replacement of a wasting asset.