IPTM7107 | Certificate for policyholder: requirement to provide a certificate: company policyholders

Chargeable event rules cease to apply to companies

The rules for taxing companies on gains from policies and contracts were changed in Finance Act 2008. The chargeable event gain rules no longer apply from the start of the first accounting period of the company to begin on or after 1 April 2008 – the ‘company’s start date’ – and instead the loan relationships rules apply - IPTM3900 onwards. So, during the year ended 31 March 2009, all companies moved to the new rules and from 1 April 2009 no companies remained within the chargeable event gain rules.

Although there is no requirement to issue chargeable event certificates to a company policyholder that is within the new rules, an insurer will not be penalised for doing so. This recognises that, for instance, it may not be easy for an insurer to distinguish on its systems policies held by a company from other policies. So, the insurer may continue reporting chargeable events on or after 1 April 2009 to policyholders if it is more convenient or easier to do so.