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HMRC internal manual

Insurance Policyholder Taxation Manual

When events occur: no chargeable event

There are three special circumstances in which a chargeable event that might have been expected will not occur.

Assignments on divorce

The first relates to assignments or part assignments under proceedings of a court, such as divorce proceedings. An assignment or part assignment that is made under a court order relating to such proceedings reflects the exercise by the court of its independent statutory jurisdiction. It is not the consequence of any party agreeing to surrender alternative rights and so is not for money or money’s worth. Such assignments cannot therefore give rise to chargeable events. More detail at IPTM7370 onwards.

Pre-26 June 1982 policies and contracts previously assigned for value

The second relates to life policies or annuity contracts made before 26 June 1982 that have been assigned for money or money’s worth. The chargeable event regime does not apply to these if rights under the policy or contract were assigned for money or money’s worth before that date and are not held by the original beneficiary unless after 23 August 1982 any of the following applies

  • the rights under the policy are again assigned for money or money’s worth
  • a payment is made under the policy or contract by way of premium
  • a sum is lent

    • by, or by arrangement with, the issuer of the policy
    • to, or at the direction of, a chargeable individual.

Maturity rollover options exercised before 9 April 2003

If a policy contains an option to reinvest all of the proceeds of the policy on maturity into a new policy and that option was exercised before 9 April 2003 then the maturity is not treated as chargeable event. But where such an option is exercised on or after 9 April 2003, the maturity is a normal chargeable event.

Further reference and feedback IPTM1013