IPTM2080 - Variations
ICTA88/SCH15/PARAA1 & A2
A variation occurs if the terms of a protected policy are varied on or after 21 March 2012 resulting in the premium period lengthening, the total premiums payable increasing or both.
Additionally any policy that is varied on or after 6 April 2013 resulting in the premium period shortening, the total premiums payable decreasing or both will also be subject to variation.
NB: A variation for the purposes of the annual premium limit has a different definition to a ‘significant variation’ for the purposes of ICTA88/SCH15/PARA17. See IPTM8145 for the definition of a significant variation for the purposes of Paragraph 17.
Where a qualifying policy issued before 21 March 2012 is varied by increasing the premiums payable on or after 21 March 2012 that policy will become a restricted relief qualifying policy (RRQP) from the date of the variation if the annual premium limit of £3,600 is exceeded. See IPTM2076.
Likewise, the variation of the policy to decrease premiums payable is a premium limit event - that is the beneficiary, or beneficiaries, under the policy need to assess whether they are in breach of the annual premium limit following such an event. If the beneficiary is in breach of the annual premium limit then the policy will be a RRQP thereafter.