|
| |
|
(a) | a relevant transaction that is a chargeable event occurs in a different tax |
| |
year from that in which the insurance year ends, and |
| |
(b) | apart from subsection (4), a person would be liable to tax on the gain |
| |
under this Chapter for the tax year in which the transaction occurs. |
| |
(4) | The gain is charged to tax under this Chapter for the tax year in which the |
| 5 |
insurance year ends instead. |
| |
(5) | If the relevant transaction occurs in the final insurance year, the chargeable |
| |
event within subsection (1) is treated as occurring before the chargeable event |
| |
| |
| 10 |
515 | Requirement for annual calculations in relation to personal portfolio bonds |
| |
(1) | This section applies if a policy or contract to which this Chapter applies is a |
| |
personal portfolio bond at the end of an insurance year. |
| |
(2) | But this section does not apply if the insurance year is the final insurance year. |
| |
(3) | A calculation is to be made in accordance with section 522 in relation to the |
| 15 |
policy or contract as at the end of the insurance year to determine— |
| |
(a) | whether a gain has arisen on the policy or contract in relation to that |
| |
| |
(b) | if so, the amount of the gain. |
| |
(4) | The calculation is in addition to any other calculation which is required to be |
| 20 |
made under this Chapter in relation to the policy or contract. |
| |
516 | Meaning of “personal portfolio bond” |
| |
(1) | In this Chapter “personal portfolio bond” means a policy of life insurance, |
| |
contract for a life annuity or capital redemption policy which meets conditions |
| |
| 25 |
| This is subject to section 517. |
| |
(2) | Condition A is that, under the terms of the policy or contract, some or all of the |
| |
benefits are determined by reference to— |
| |
(a) | fluctuations in, or in an index of, the value of property of any |
| |
| 30 |
(b) | the value of, or the income from, property of any description. |
| |
(3) | For this purpose it does not matter whether or not the index or property is |
| |
specified in the policy or contract. |
| |
(4) | Condition B is that the terms of the policy or contract permit the selection of the |
| |
index or some or all of the property by— |
| 35 |
(a) | the holder of the policy or contract, |
| |
(b) | a person connected with the holder, |
| |
(c) | the holder and such a connected person acting together, |
| |
(d) | a person acting on behalf of the holder, |
| |
(e) | a person acting on behalf of a person connected with the holder, or |
| 40 |
(f) | a person acting on behalf of the holder and such a connected person |
| |
| |
|
| |
|
| |
|
(5) | In subsection (4) “holder”, in the case of a policy or contract held by two or |
| |
more persons, means any of them. |
| |
517 | Policies and contracts which are not personal portfolio bonds |
| |
(1) | A policy or contract is not a personal portfolio bond merely because its terms |
| |
permit the selection of an index as described in section 516(4) if that index— |
| 5 |
(a) | falls within one of the categories listed in section 518, and |
| |
(b) | meets one of the index selection conditions (see section 519). |
| |
(2) | A policy or contract is not a personal portfolio bond merely because its terms |
| |
permit the selection of property as described in section 516(4) if all of the |
| |
property which may be so selected— |
| 10 |
(a) | falls within one or more of the categories listed in section 520, and |
| |
(b) | meets one or both of the property selection conditions (see section 521). |
| |
| |
(1) | This section sets out the categories of index referred to in section 517(1). |
| |
(2) | Category 1 is the retail prices index. |
| 15 |
(3) | Category 2 is any general index which— |
| |
(a) | is similar to the retail prices index, and |
| |
(b) | is published by the government of any foreign state or an agent of such |
| |
| |
(4) | Category 3 is any published index of prices of shares listed on a recognised |
| 20 |
| |
519 | The index selection conditions |
| |
(1) | The index selection conditions are— |
| |
(a) | the general selection condition (see subsection (2)), and |
| |
(b) | the class selection condition (see subsection (3)). |
| 25 |
(2) | An index meets the general selection condition if, at the time when it may be |
| |
selected, the opportunity to select the same index is available to— |
| |
(a) | all policy holders of the insurance company, or |
| |
(b) | persons acting on behalf of those policy holders. |
| |
(3) | An index meets the class selection condition if, at the time when it may be |
| 30 |
selected, the opportunity to select the same index is available to— |
| |
(a) | a particular class or classes of policy holders of the insurance company, |
| |
| |
(b) | persons acting on behalf of the members of that class or those classes. |
| |
(4) | A group of policy holders to whom the opportunity to select an index is |
| 35 |
available is a “class” for the purposes of subsection (3) if— |
| |
(a) | neither membership of the class nor the opportunity are limited to |
| |
| |
(b) | the question whether a policy holder is a member of the class, or has the |
| |
opportunity, is determined solely by the insurance company, and |
| 40 |
|
| |
|
| |
|
(c) | the opportunity is clearly identified in marketing or other promotional |
| |
material published by the insurance company to members of the |
| |
public, or members of the public who are intending investors, as |
| |
available generally to any person falling within its terms. |
| |
| 5 |
“holder” has the meaning given by section 516(5), and |
| |
“policy holder” includes a holder of a life annuity contract. |
| |
520 | The property categories |
| |
(1) | The table in subsection (2) sets out the categories of property referred to in |
| |
| 10 |
| |
| | | | | | | property which the insurance company has |
| | | | | appropriated to an internal linked fund |
| | | | | units in an authorised unit trust |
| | 15 | | | shares in an investment trust |
| | | | | shares in an open-ended investment company |
| | | | | | | | | | a policy or contract to which this Chapter applies, |
| | | | | other than an excluded policy or contract (see |
| | 20 | | | | | | | | an interest in a collective investment scheme |
| | | | | | | | | | (a) | a company which is resident outside the |
| | | | | United Kingdom (other than an open-ended |
| | 25 | | | | | | | | (b) | a unit trust scheme the trustees of which are |
| | | | | | | | | | (c) | any other arrangement which takes effect by |
| | | | | virtue of the law of a territory outside the |
| | 30 | | | United Kingdom, and which under that law |
| | | | | creates rights in the nature of co-ownership |
| | | | | (without restricting that term to its legal |
| | | | | meaning in any part of the United |
| | | | | | | 35 |
|
(3) | A policy or contract is “excluded” if— |
| |
(a) | the policy or contract is itself a personal portfolio bond, |
| |
(b) | the value of any benefits under the policy or contract is or has at any |
| |
time been capable of being determined directly or indirectly by |
| |
reference to a personal portfolio bond, or |
| 40 |
|
| |
|
| |
|
(c) | a personal portfolio bond is related property in relation to the policy or |
| |
| |
| |
| |
(a) | includes any sum which is deposited— |
| 5 |
(i) | in a building society account (including a share account) or |
| |
| |
(ii) | in a bank account or similar account, but |
| |
(b) | does not include cash which is acquired wholly or partly for the |
| |
purpose of realising a gain from its disposal, |
| 10 |
“collective investment scheme” has the meaning given by section 235 of |
| |
FISMA 2000, and “interest”, in relation to such a scheme, means the |
| |
beneficial entitlement of a participant in such a scheme, |
| |
“internal linked fund” has the meaning given by— |
| |
(a) | the Interim Prudential Sourcebook for Insurers made by the |
| 15 |
Financial Services Authority under FISMA 2000, or |
| |
(b) | rules made by the Authority under FISMA 2000 and having |
| |
effect for the time being in place of the Sourcebook, |
| |
“open-ended investment company” has the meaning given by section 236 |
| |
| 20 |
“related property” has the same meaning as in section 625 (see subsection |
| |
| |
521 | The property selection conditions |
| |
(1) | The property selection conditions are— |
| |
(a) | the general selection condition (see subsection (2)), and |
| 25 |
(b) | the class selection condition (see subsection (3)). |
| |
(2) | Property meets the general selection condition if, at the time when it may be |
| |
selected, the opportunity to select property falling within the same category is |
| |
| |
(a) | all policy holders of the insurance company, or |
| 30 |
(b) | persons acting on behalf of those policy holders. |
| |
(3) | Property meets the class selection condition if, at the time when it may be |
| |
selected, the opportunity to select property falling within the same category is |
| |
| |
(a) | a particular class or classes of policy holders of the insurance company, |
| 35 |
| |
(b) | persons acting on behalf of the members of that class or those classes. |
| |
(4) | A group of policy holders to whom the opportunity to select property falling |
| |
within a particular category is available is a “class” for the purposes of |
| |
| 40 |
(a) | neither membership of the class nor the opportunity are limited to |
| |
| |
(b) | the question whether a policy holder is a member of a class, or has the |
| |
opportunity, is determined solely by the insurance company, and |
| |
(c) | the opportunity is clearly identified in marketing or other promotional |
| 45 |
material published by the insurance company to members of the |
| |
|
| |
|
| |
|
public, or members of the public who are intending investors, as |
| |
available generally to any person falling within its terms. |
| |
| |
“holder” has the meaning given by section 516(5), and |
| |
“policy holder” includes a holder of a life annuity contract. |
| 5 |
522 | Method for making annual calculations under section 515 |
| |
(1) | This section deals with the calculation required to be made in relation to a |
| |
policy or contract as at the end of an insurance year under section 515 to |
| |
| |
(a) | whether a gain has arisen in relation to that year, and |
| 10 |
(b) | if so, the amount of the gain. |
| |
(2) | There is a gain if, as at the end of the insurance year, the sum of PP and TPE |
| |
| |
| |
PP is the total amount of premiums paid up to the end of the insurance |
| 15 |
| |
TPE is the total amount of personal portfolio bond excesses (see section |
| |
| |
TSG is the total amount of part surrender gains (see section 524). |
| |
(4) | The gain is equal to 15% of the excess. |
| 20 |
523 | The total amount of personal portfolio bond excesses |
| |
(1) | To calculate the total amount of personal portfolio bond excesses— |
| |
| |
| Apply the calculation in section 522 in relation to the policy or contract as at the |
| |
end of each previous insurance year during its existence in succession starting |
| 25 |
with the first such year. |
| |
| |
| Determine whether in each case the calculation produces a gain and, if so, its |
| |
| |
| 30 |
| Add together all the amounts produced by step 2. |
| |
(2) | But if there is no previous insurance year during the existence of the policy or |
| |
contract, the total amount of personal portfolio bond excesses is nil. |
| |
524 | The total amount of part surrender gains |
| |
(1) | To calculate the total amount of part surrender gains— |
| 35 |
| |
| Apply the provisions of this Chapter mentioned in subsection (3) as modified |
| |
by subsections (4) and (5) in relation to the policy or contract as at the end of |
| |
each previous insurance year during its existence. |
| |
| 40 |
| Determine whether in each case those provisions produce a gain and, if so, its |
| |
| |
|
| |
|
| |
|
| |
| Add together all of the amounts produced by step 2. |
| |
(2) | But if there is no previous insurance year during the existence of the policy or |
| |
contract, the total amount of part surrender gains is nil. |
| |
(3) | The provisions of this Chapter which apply for the purposes of the calculation |
| 5 |
| |
(a) | subsections (2) to (6) of section 507 (method for making periodic |
| |
| |
(b) | subsections (1) to (3) and (5) of section 508 (the value of rights partially |
| |
| 10 |
(4) | The provisions of section 507 mentioned in subsection (3) apply for the |
| |
purposes of this section with the omission of all references in that section— |
| |
(a) | to the assignment of any part of or share in the rights under the policy |
| |
| |
(b) | to the value of any part of or share in the rights under the policy or |
| 15 |
| |
(5) | In the application of step 3 in subsection (4) of section 507 for the purposes of |
| |
this section, the reference in that step to previous calculation events does not |
| |
include a reference to an excess event consisting of the assignment of a part of |
| |
or share in the rights under the policy or contract. |
| 20 |
525 | Chargeable events where annual calculations show gains |
| |
(1) | This section applies if the calculation in section 522 shows that a gain has arisen |
| |
in relation to an insurance year. |
| |
(2) | The gain is treated as arising at the end of the insurance year on the occurrence |
| |
of a chargeable event at that time. |
| 25 |
526 | Power to make regulations about personal portfolio bonds |
| |
(1) | The Treasury may by regulations make provision about the administration of |
| |
the charge to tax on personal portfolio bonds. |
| |
(2) | The regulations may modify— |
| |
(a) | any provision of this Chapter, or |
| 30 |
(b) | any provision of Chapter 2 of Part 13 of ICTA. |
| |
| |
(a) | make different provision for different cases, different circumstances or |
| |
| |
(b) | make incidental, supplemental, consequential or transitional provision |
| 35 |
| |
(4) | In this section “modify” includes amend or repeal. |
| |
|
| |
|