IPTM7130 - Certificate for policyholder: information to be provided: whole assignments: premiums paid: ICTA88/S552(1) and (5)

Where the chargeable event is an assignment of all the rights under the policy or contract, that is whole assignment for money or money’s worth, some of the reporting requirements are the same as for other events. In particular, the insurer must still report:

  • the unique identifying designation given to the policy or contract – normally, the policy number will suffice
  • the ‘number of years’– see IPTM7560. This is for the purpose of calculating the amount of top-slicing relief
  • whether any income tax would be treated as paid at the basic rate on a gain, on the assumption that the person liable is an individual - see IPTM7555
  • the nature of the event, that is, an assignment of all the rights under the policy, and date on which it occurred.

Under ICTA88/S552(5)(c) and (d), the insurer is not required to report the amount of gain on the assignment or the amount of income tax treated as paid. Instead, it must also report the premiums or consideration paid and the other information on the history of the policy listed in IPTM7135 to assist the liable person to calculate the gain.

Premiums or consideration paid

The insurer must report under this heading for

  • life insurance policies: the premiums paid to date of the assignment under the policy or any related policy - see IPTM7530 for more on what is meant by premiums

  • capital redemption policies: the amount of premiums paid to date of assignment under the policy or any related policy, unless it knows that all the rights under the policy have previously been assigned for money or money’s worth. If so, then it should instead report the total of the amount or value of the consideration given for the last such assignment (if known) and the premiums paid since that assignment.

    If the insurer does not have details of the value of the earlier assignment it would be helpful if it could request them from the policyholder to ensure that an accurate gain is reported. Otherwise it will be sufficient to report premiums paid since the last assignment together with a note to the effect that the value of the last assignment is not known but should be included as a deduction in computing the gain

  • life annuity contracts: the amount of premium or lump sum consideration previously paid under the contract.

‘Related policies’ include any policy in respect of which a later policy has been issued in substitution, or in consequence of an option conferred by the earlier polic- see IPTM7515.