IPTM7365 - Assignments: specific exceptions by legislation

There are certain assignments that are specifically prevented by the legislation from being chargeable events.

Assignments between spouses or civil partners

An assignment of all or part of the rights under a policy or contract between spouses or civil partners living together is disregarded for the purposes of the chargeable event legislation. This means that it does not give rise to a chargeable event, even if it is for money or money’s worth, and neither are there any implications for calculations of gains on later events. If an insurer is aware that an assignment between spouses or civil partners has occurred and has no information to indicate that they do not still live at the same address then it may assume that there is no chargeable event and that there is no need for chargeable event certificates.

Assignments by way of security for a debt or on discharge of a debt

An assignment of all or part of the rights under a policy or contract is also disregarded if it is:

• by way of security for a debt, for instance to a lending bank, or
• on the discharge of a debt secured by all or part of the rights, for instance reassignment by the bank when the loan is paid off.

If an insurer holds information to show that an assignment was made in these specific circumstances then it should not issue chargeable event certificates.