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HMRC internal manual

Insurance Policyholder Taxation Manual

Certification of qualifying policies: basic requirement

Requirement for certification of policies made on or after 1 April 1976

It is a condition of the qualifying policy rules that a policy made on or after 1 April1976, unless it is a tax exempt friendly society policy, must be certified as qualifyingby the Commissioners for HM Revenue and Customs (HMRC) or its predecessor the Board ofInland Revenue. Although a policy can be individually certified, usually the requirementis given effect to through certification that a standard form is capable of describing aqualifying policy.

Even if the policy meets all the other conditions to be qualifying, it will not be treatedas qualifying unless it has been certified.

A policy that has not been certified but is capable of certification may be submitted toHMRC for certification and, once it has been certified, it will then be treated asqualifying from the date that it was made. But a policy that has come to an end cannot becertified in any circumstances.

Friendly society policies

Although tax exempt friendly society policies do not need to be certified, there areother conditions that need to be met, which are described in IPTM8400onwards. But where a friendly society writes qualifying policy business that is not taxexempt, those policies must be certified in the same way as qualifying policies frominsurance companies.

The guidance on certification of qualifying policies that follows assumes that thepolicies concerned are not tax exempt policies issued by a friendly society.

Foreign policies

Policies written by a foreign insurer cannot be certified unless issued through a UKpermanent establishment of that company. However, a policy issued in the UK insubstitution for a foreign policy may be certified as qualifying in certain circumstances- see IPTM8135.

Policies made before 1 April 1976

A policy made before 1 April 1976 does not need to be certified as qualifying unless itwas varied between 1 April 1976 and 5 April 1979.

If it is varied after 5 April 1979 and remains qualifying then it does not need to becertified. However, if the variation is significant, the policyholder is entitled torequest a certificate from the insurer confirming that the policy is qualifying.

Further reference and feedback IPTM1013