Section 485 | Disregard of certain events in relation to qualifying policies

(1)In relation to a qualifying policy, the events that count as chargeable events are restricted as follows.

(2)Death or the maturity of the policy is only a chargeable event if—

(a)the policy has been converted into a paid-up policy before the end of whichever of the following periods ends sooner—

(i)10 years from the making of the insurance, and

(ii)three-quarters of the term for which the policy is to run (assuming it is not ended by death or disability), or

(b)there is a company interest in the rights under the policy immediately before the event occurs.

(3)An event specified in section 484(1)(a)(i) to (iv) (surrender or assignment of all rights, final participation in profits and chargeable event where periodic calculation shows gain) is only a chargeable event if—

(a)the event occurs or the policy has been converted into a paid-up policy before the end of whichever of the periods specified in subsection (2)(a)(i) and (ii) ends sooner, or

(b)there is a company interest in the rights under the policy immediately before the event occurs.

(4)For the purposes of subsections (2)(b) and (3)(b) there is a company interest in the rights under a policy if—

(a)a company beneficially owns them,

(b)they are held on trusts created by a company, or

(c)they are held as security for a company's debt.

(5)An event specified in section 484(1)(a)(v) (part surrenders and assignments: chargeable events where transaction-related calculations show gains) is only a chargeable event if—

(a)the time as at which the calculation showing the gain is required to be made under section 498(2) is before the end of whichever of the periods specified in subsection (2)(a)(i) and (ii) ends sooner, or

(b)the policy has been converted into a paid-up policy before that time.

(6)If the policy has been varied so as to increase the premiums payable under it, subsections (2), (3) and (5) apply as if they referred instead to the following periods—

(a)10 years from the variation taking effect, and

(b)three-quarters of the term for which the policy is to run from the variation (assuming it is not ended by death or disability).

(7)If a qualifying policy is substituted for another policy in circumstances where paragraph 25(1) or (3) of Schedule 15 to ICTA applies (replacement of a policy issued by a non-UK resident company by a policy which is not so issued), the surrender of the rights conferred by the other policy is not a chargeable event.

(8)This section is subject to sections 463A and 463C.