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HMRC internal manual

Insurance Policyholder Taxation Manual

From
HM Revenue & Customs
Updated
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Certificate for policyholder: address to which the policyholder’s certificate should be sent

The normal rule is for an insurer to meet its statutory obligation by sending the certificate to the policyholder’s current residential address.

Use of ‘care of’ or other addresses

The insurer would also meet that obligation by sending the certificate to an address specified by the policyholder so long as it is clear that the policyholder would accept that this is delivery within the meaning of the legislation. This might be because, for instance, the policyholder has instructed the insurer to use a ‘care of’ or business address for all communications.

However, there is a distinction between the duty to report gains to the policyholder and the duty to report the gain and policyholder’s details to HMRC. In the latter case, HMRC would not see the need for the use of ‘care of’ addresses save in the most exceptional circumstances - see IPTM7180.

‘Gone away’ cases

Where the insurer has no current address for the policyholder in such circumstances that the insurer is unable to make any payments under the policy it should send the chargeable event certificate to the policyholder’s last known address. But HMRC would not seek to impose penalties where an insurer failed to send a certificate because it did not have an up-to-date address for the policyholder.

Power of attorney

The insurer may know that an ‘ordinary’, ‘enduring’, or ‘property and financial affairs lasting’ power of attorney has been granted over the assets of an incapacitated policyholder, and whether or not it has been registered with the Office of the Public Guardian. The insurer may choose to send the certificate for the policyholder to the address of the attorney, rather than the address of the incapacitated policyholder, provided it is reasonably sure that the policyholder would consider delivery to the attorney to be satisfactory delivery to them.

But as with the use of ‘care of’ addresses, there is a distinction between the duty to send a certificate to the policyholder and the duty to report the policyholder’s address on the certificate for HMRC - see IPTM7180.

Deceased policyholder - cases where probate is delayed

Where the policy has come to an end due to the death of the policyholder, the certificate should be sent to the personal representatives of the deceased before the time limit, that is three months after the insurer is informed of the death. But if probate has not been obtained and personal representatives appointed by then, the certificate should be sent in the name of the deceased to the last known address of the deceased before he or she died.

Where the policy continues after the death of the policyholder, it is also possible for gains to arise before personal representatives are appointed, for instance if the policy matures or the person whose life is insured by the policy also dies. If probate has still not been obtained by the time limit for reporting the gain then insurers should send the chargeable event certificate to the last known address of the deceased, in the name of ‘the personal representatives of the deceased’ or something similar.

In neither case should the insurer delay issue of the certificate past the time limit because personal representatives have not been appointed or the insurer has not been informed who the personal representatives are.

Further reference and feedback IPTM1013