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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Life insurance policies/deferred annuities: meaning of 'interest' in rights

TCGA92/S210 (13) provides that someone who is a ‘co-owner’ of the rights conferred by a life insurance policy or deferred annuity has an ‘interest’ in those rights. Where two or more persons co-own the rights they each have an ‘interest’ in them regardless of whether they own the rights jointly or in common, or whether they each have an equal interest.

One consequence of this is that if a life insurance policy is used as security for a loan, so that some person other than the actual owner of the rights under the policy may have some sort of interest (in the widest sense of the word) in the policy, that person does not have an ‘interest’ in the rights for the purposes of TCGA92/S210. And similarly, if someone were granted an option over a life insurance policy, that person would not be a co-owner of the rights conferred by the policy, and so would not have an ‘interest’ in them for those purposes.