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HMRC internal manual

Insurance Policyholder Taxation Manual

Connected policies

Policies with interdependent terms of duration

Where the terms of one policy provide that it will continue in force only so long asanother policy remains in force, neither of the policies will qualify unless thequalifying rules are satisfied when the two policies are considered together as onepolicy.

This rule applies to any insurance policy that might be written to come to an endautomatically when a separate endowment policy comes to an end, whether or not it is along-term life policy.

Policies with connected terms

Where a policy is connected with another policy and the benefits under one of thepolicies are greater than one would reasonably expect if it were looked at without regardto the other policy, then that policy does not qualify.

For this purpose, two policies are connected if they are in forcesimultaneously at any time and one policy is issued with reference to the other or with aview to enabling or facilitating that other policy’s issue on particular terms. Twopolicies cannot be connected in this way unless they are written in the course oflong-term insurance business, in the UK or overseas.

Further reference and feedback IPTM1013