IPTM7405 - Pre-26 June 1982 second hand life policies and life annuity contracts

There is an exemption from the chargeable event rules for certain life policies or life annuity contracts taken out before 26 June 1982 where the rights under the policy or contract were assigned for money or money’s worth before that date and are not held by the original beneficial owner. The exemption does not extend to capital redemption policies.

Such policies and contracts are taken outside the chargeable event regime and no chargeable events arise unless after 23 August 1982 any of the following apply:

• the rights under the policy or contract are again assigned for money or money’s worth
• further premium is paid into the policy or contract
• a policy loan is made - see IPTM7345 for more on policy loans.

Insurers should issue chargeable event certificates in respect of events arising on pre-26 June 1982 policies unless they are sure that all the conditions for the policy to be outside the chargeable event regime are met.