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HMRC internal manual

Insurance Policyholder Taxation Manual

Chargeable events: qualifying policies: companies

Accounting periods of the company beginning on or after 1 April 2008The chargeable event gain rules no longer apply to companies from the start of the first accounting period of the company to begin on or after 1 April 2008 – the ‘company’s start date’ – and instead the loan relationships rules apply –

IPTM3900 onwards and IPTM7107.

Accounting periods of the company beginning before 1 April 2008 In contrast to the position for individuals, where the person chargeable on any gains under a qualifying policy is a company, whether the policy is ‘time-served’ is generally of no significance. The full range of chargeable events listed inI

PTM3400 may arise on the policy irrespective of how long it has run, subject to the following exception.

The exception is where there is a part surrender or assignment event arising when a transaction-related calculation shows a gain. The position is then the same as for individuals, as described in IPTM7310: the event will not be a chargeable event if the insurance year in which it occurs ends on or after the date on which the policy becomes ‘time-served’. This exception is an unintended anomaly arising from the changes to the chargeable event rules introduced in FA2001.

Where the policyholder is a company, the insurer may if it wishes assume that the company is also the chargeable person for the purposes of determining whether a chargeable event should be reported on a qualifying policy.

Further reference and feedback IPTM1013