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HMRC internal manual

Insurance Premium Tax

Liability of insurance contracts: Goods in foreign or international transit: Purpose of this exemption

The purpose of this exemption is to avoid taxing international trade by not taxing the insurance of goods in international transit. This avoids adding to the cost of UK exports. The exemption does not cover international removals of goods for private individuals (i.e. not in the course of any business). The IPT liability of insurance covering such removals will be determined either as travel risks of a person travelling (paragraph 4 of Schedule 6A to the Finance Act 1994 refers) or, more likely, under the location of risk policy for individuals. See IPT04320.