IPTM2160 - Life assurance premium relief: compulsory purchase of deferred annuities

Until 5 April 2013, relief was available for compulsory contributions made by an employee to secure a deferred annuity payable after the contributor’s death for the benefit of a widow, widower or civil partner, or dependent children. The obligation could be statutory or under terms of employment. It was sometimes referred to as ’Widows and Orphans’ – ’W&O’.

The amount of premiums on which relief could be given was limited to £100. If an employee made compulsory contributions, and the employer also paid contributions on the employee’s behalf, only one £100 limit was available.

Relief was due in terms of tax at basic rate on the amount of contributions, but was sometimes given under ’net pay’ arrangements, see IPTM2100.