Calculating the value of the premium: the de minimis provision: when and how to apply de minimis provision
The *de minimis *provision should be applied according to the facts known at the outset of the contract. The insurer will need to establish that:
- the contract is a mixed (taxable and exempt) policy;
- the entire premium paid for the policy is £500,000 or less (except cases shown in IPT05950);
- the premium, when apportioned, shows a taxable element of 10% or less.
This apportionment must be carried out on a ‘just and reasonable’ basis.