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HMRC internal manual

Insurance Policyholder Taxation Manual

Certificate for policyholder: information to be provided: whole assignments: other information on history of policy

Total previous gains

Insurers must also report the total of any previous chargeable event gains on earlier excess events, part surrender or assignment events and personal portfolio bond events, on the policy or any related policy. See IPTM7600 onwards for details of excess events and part surrender or assignment events and how gains are computed. See IPTM7700 onwards for the PPB rules.

Total previous capital payments under the policy or contract

The insurer must report the amount or value of any capital sums of the kind referred to in ITTOIA05/S492 (1)(b) to (e) (previously relevant capital payments as referred to in ICTA88/S541 (5) and ICTA88/S543 (3)).

Insurers should only include any particular sum once in the certificate, even if it is both a sum under ITTOIA and was a relevant capital payment under the previous legislation in ICTA88.

The amount to be reported has not been changed by ITTOIA05, merely its description in the legislation, but insurers should, if possible, describe the amount on the certificate as ‘previous capital payments’. Continuing to describe them as relevant capital payments will not, however, be wrong.

See IPTM7525 - in most cases, previous capital payments will simply be the capital sums or benefits which have been paid under the policy or contract, and any related policy, before the assignment, excluding those paid on disability.

Value of parts previously assigned

Insurers must report the total value of parts of the policy which have previously been assigned. The value of a part assigned is defined to be its surrender value, on the assumption that the part had instead been surrendered.

This includes part assignments not for money or money’s worth made before 6 April 2001 but not part assignments by way of gift made on or after that date.

Exempt capital amounts paid on account of a purchased life annuity

If the contract is a purchased life annuity and there have been payments on account of the annuity before the assignment, an insurer must also report the aggregate of the amounts exempt under ITTOIA05/S717 or the aggregate of the exempt capital elements determined under ICTA88/S656. IPTM4300 onwards gives details of what is a purchased life annuity and exempt capital element.

Further reference and feedback IPTM1013