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HMRC internal manual

Insurance Policyholder Taxation Manual

HM Revenue & Customs
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The charge to tax: corporation tax: points of difference

This page only applies to events occurring in a company’s accounting period starting before 1 April 2008. For accounting periods starting on or after 1 April 2008, the chargeable event gain rules no longer apply to investment life policies, purchased life annuity contracts and capital redemption policies owned by companies and instead they are taxed under the loan relationships rules - see IPTM3900 onwards. 

In most cases, the chargeable event regime is the same for charges on individuals and companies. The differences are

  • the restricted scope of chargeable events that applies in the case of qualifying policies does not apply to charges on companies - see IPTM3310 
  • companies are not entitled to top-slicing relief - IPTM3820, to deficiency relief - IPTM3860, or to tax treated as paid - see IPTM3800.
  • companies are only chargeable on capital redemption policies

    • when they are issued by non UK-resident insurers
    • from 10 February 2005, on those policies that are not money debts, such as annuities certain, as otherwise the loan relationships legislation applies.

The difference in legislative references is discussed at IPTM1075. The legislation provides for continuity in relation to policies and contracts that are assigned between individuals and companies.