Section 541B | Section 541A: further definitions ^F1

(1)This section supplements section 541A.

(2)“Commission”, in relation to a policy or contract, includes any passing of value to or for the benefit of an intermediary, or a person connected with an intermediary, that can reasonably be taken to represent a reward in respect of the policy or contract.

(3)Commission in respect of a policy or contract is “reinvested” if, as a result of a waiver of an entitlement to it, there is an increase in the total value of a relevant person's policies and contracts.

(4)The amount of commission reinvested is the amount of the increase.

(5)Commission in respect of a policy or contract is “rebated” if—

(a)value passes (directly or indirectly) from an intermediary, or a person connected with an intermediary, to or for the benefit of a relevant person (and the passing of value does not amount to the reinvestment of the commission), and

(b)the passing of value can reasonably be taken to be in respect of the commission.

(6)The amount of commission rebated is the amount of value passed.

(7)A policy or contract is a person's policy or contract if a gain arising in connection with it would be—

(a)a gain for which the person, or (if the person is an individual) the person's spouse or civil partner, would be liable to tax under this Chapter, or

(b)Repealed^F2

(8)Any necessary apportionment is to be made (on a just and reasonable basis) as regards—

(a)commission which is attributable to two or more premiums, and

(b)any part of such commission that has been rebated or reinvested.

(9)Commission which is in respect of one or more policies or contracts (but is not attributable to particular premiums) is to be attributed to such premiums as is just and reasonable.

(10)In subsections (3) and (5), “relevant person” means—

(a)any of the policyholders (including any of the persons who hold the contract),

(b)a person who beneficially owns the rights under the policy or contract,

(c)if those rights are held on trust, any of the trustees, or

(d)a person connected with a person within any of paragraphs (a) to (c).