Section 66C | Rate changes: premiums relating to more than one period of cover ^F1

(1)This section applies if any Act—

(a)makes an amendment of section 51(2)(a) or (b) which alters the higher rate or standard rate (“the relevant rate”),

(b)provides for the amendment to have effect in relation to a premium falling to be regarded for the purposes of this Part as received under a taxable insurance contract by an insurer on or after a particular date (“the change date”), and

(c)makes provision that excepts from that amendment a premium which is in respect of a risk for which the period of cover begins before the change date.

(2)Subsection (3) applies if a premium which is liable to tax at the relevant rate, and which falls to be regarded for the purposes of this Part as received under a taxable insurance contract by an insurer on or after the change date, is—

(a)partly in respect of a risk for which the period of cover begins before the change date, and

(b)partly in respect of a risk for which the period of cover begins on or after that date.

(3)So much of the premium as is attributable to the risk for which the period of cover begins on or after the change date is to be treated for the purposes of this Part and the provision mentioned in subsection (1)(c) as a separate premium.

(4)Where a premium is in respect of a relevant rate matter and also a matter that is not a relevant rate matter—

(a)for the purposes of the provision mentioned in subsection (1)(c), the premium is to be treated as in respect of a risk for which the period of cover begins before the change date if the part of it attributable to the relevant rate matter is in respect of such a risk, and

(b)the reference in subsection (2) to a premium which is liable to tax at the relevant rate is to be read as a reference to so much of the premium as is attributable to the relevant rate matter (and subsection (3) is to be read accordingly).

(5)If premiums of any description are excluded from the exception mentioned in subsection (1)(c), nothing in subsections (2) to (4) applies to a premium of that description.

(6)Nothing in subsection (4) applies to an excepted premium (within the meaning given by section 69A).

(7)Any attribution under this section is to be made on such basis as is just and reasonable.

(8)In this section a “relevant rate matter” means—

(a)where the relevant rate is the standard rate, a standard rate matter as defined by section 69(12)(c);

(b)where the relevant rate is the higher rate, a higher rate matter as defined by section 69(12)(d).

(9)In subsection (1) the reference to any Act includes a resolution which has statutory effect under the Provisional Collection of Taxes Act 1968.