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HMRC internal manual

Insurance Policyholder Taxation Manual

From
HM Revenue & Customs
Updated
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Certificate for policyholder: time limits for delivery

The insurer must deliver a chargeable event certificate to the policyholder within a certain period, depending on the nature of the chargeable event.

Maturity or full surrender of the policy

On the maturity of the policy or the surrender of all rights under the policy or contract the insurer must deliver the certificate reporting the chargeable event and gain to the policyholder within 3 months of the date of the event.

Excess events

These are chargeable events within ITTOIA05/S509 (1) where periodic calculations show gains in certain cases. Such events are treated as occurring on the last day of the insurance year. See IPTM7600 onwards for more on this type of chargeable event.

The time limit for delivering a chargeable event certificate to the policyholder reporting an excess event and the gain is three months from the date of the chargeable event.

The equivalent events under the previous legislation in ICTA88 were those ‘excess gains’ under sections ICTA88/S540 (1) (a)(v) and ICTA88/S542 (1)(c) which are not events under ICTA88/S546C (7).

Personal portfolio bond events

Where an annual gain arises on a personal portfolio bond - see IPTM7700 onwards - a chargeable event is treated is arising at the end of the insurance year called a ‘personal portfolio bond event’. This event, and the gain, must be reported on a certificate to be delivered to the policyholder within three months of the date of the event.

Part surrender or assignment events

An event under ITTOIA05/S514 (1) arises where transaction-related calculations show gains. Such events are called ‘part surrender or assignment events’ - see IPTM7625 onwards. The equivalent chargeable events under the previous legislation in ICTA88 were events by virtue of ICTA88/546C (7)(a).

Such events will not generally occur at the end of an insurance year. The normal rule is that the time limit for reporting such an event, and the gain arising, to the policyholder is three months from the end of the insurance year in which the event occurs.

However, this time limit may expire before an insurer is even aware that a part surrender or assignment event has occurred because the insurer may not have been informed of relevant assignments or part assignments. If so, the time limit is instead three months from the date that the insurer receives written notification that such an event has occurred. Insurers should treat any written notification from the policyholder of an assignment or part assignment that indicates that a part surrender or assignment event has occurred as notification of the event.

Death or whole assignments

Where the chargeable event is a death or an assignment for money or money’s worth of all the rights under the policy or contract, the time limit for the insurer to deliver the chargeable event certificate to the policyholder is three months from the date it receives written notification of the event.

Further reference and feedback IPTM1013