Finance Act, 2002

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“Personal portfolio life policy.

730BA.—(1) In this section—

‘building society’ has the same meaning as in section 256;

‘foreign life policy’ has the same meaning as in section 730H;

‘internal linked fund’, in relation to an assurance company, means a fund maintained by the assurance company to which fund the assurance company appropriates certain linked assets and which fund may be subdivided into subdivisions the value of each of which is determined by the assurance company by reference to the value of such linked assets;

‘investment undertaking’ has the same meaning as in section 739B;

‘land’ includes an interest in land and also includes shares deriving their value or the greater part of their value directly or indirectly from land other than shares quoted on a recognised stock exchange;

‘linked asset’, in relation to an assurance company, means an asset of the assurance company which is identified in the records of the assurance company as an asset by reference to the value of which asset the benefits provided for under a life policy are to be determined;

‘policyholder’ has the same meaning as it has for the purposes of section 730E;

‘prices’ index' means—

(a) the all items consumer price index compiled by the Central Statistics Office,

(b) any general index of prices corresponding to such consumer price index and duly published by or on behalf of any state other than the State, or

(c) any published index of prices of shares listed on a recognised stock exchange;

‘public’ means individuals generally, companies generally, or a combination of these, as the case may be;

‘units’ has the same meaning as in section 739B.

(2) In this Chapter and in Chapter 6 of this Part ‘personal portfolio life policy’ means, subject to subsection (4), a life policy or a foreign life policy, as the case may be, under whose terms—

(a)  (i) some or all of the benefits conferred by the policy are or were determined by reference to the value of, or the income from, property of any description (whether or not specified in the policy), or

(ii) some or all of the benefits conferred by the policy are or were determined by reference to fluctuations in, or fluctuations in an index of, the value of property of any description (whether or not specified in the policy),

and

(b) some or all of the property or the index may be or was selected by or the selection of some or all of the property or index may be or was influenced by—

(i) the policyholder,

(ii) a person acting on behalf of the policyholder,

(iii) a person connected (within the meaning of section 10) with the policyholder,

(iv) a person connected (within that meaning) with a person acting on behalf of the policyholder,

(v) the policyholder and a person connected (within that meaning) with the policyholder, or

(vi) a person acting on behalf of both the policyholder and a person connected (within that meaning) with the policyholder.

(3) For the purposes of paragraph (b) of subsection (2) and without prejudice to the application of that provision, the terms of a life policy or a foreign life policy shall be treated as permitting the selection referred to in that paragraph where—

(a) the terms of the policy or any other agreement between any person referred to in that paragraph and the assurance company concerned—

(i) allow the exercise of an option by any person referred to in that paragraph to make the selection referred to in that paragraph,

(ii) give the assurance company discretion to offer any person referred to in that paragraph the right to make the selection referred to in that paragraph, or

(iii) allow any of the persons referred to in that paragraph the right to request, subject to the agreement of the assurance company, a change in the terms of the policy such that the selection referred to in that paragraph may be made by any of those persons,

or

(b) the policyholder is unable under the terms of the policy to select any of the property so as to determine the benefits under the policy, but any of the persons referred to in that paragraph has or had the option of requiring the assurance company to appoint an investment advisor (no matter how such a person is described) in relation to the selection of the property which is to determine the benefits under the policy.

(4) A life policy or a foreign life policy is not a personal portfolio life policy if—

(a)  (i) the only property which may be or has been selected is—

(I) property which the assurance company concerned has appropriated to an internal linked fund,

(II) property consisting of any of the following—

(A) units in an investment undertaking, or

(B) cash, including cash deposited in a bank account or similar account (including cash deposited in a share account with a building society) except where the acquisition of the cash was made wholly or partly for the purpose of realising a gain from the disposal of the cash, or

(III) property consisting of a combination of the property specified in clauses (I) and (II),

and the property satisfies the condition specified in subsection (5), or

(ii) the only index which may be or has been selected is of a description specified in subsection (6),

and

(b) as respects a life policy or a foreign life policy commenced on or after 5 December 2001 (other than a policy in respect of which the only property which may be selected is property described in paragraph (a)(i)(II)(B) or a policy in respect of which marketing or other promotional literature was published before that date) the terms under which the policy is offered meet the requirements of subsection (7).

(5) The condition specified in this subsection is that at the time when the property is or was available to be selected the opportunity to select—

(a) in the case of land, that property, and

(b) in any other case, property of the same description as the first-mentioned property,

is or was available to the public on terms which provide or provided that the opportunity to select the property is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the assurance company concerned, as available generally to any person falling within the terms of the opportunity.

(6) The description of index specified by this subsection is an index consisting of a prices' index or a combination of prices' indices where at the time the index is or was available to be selected the opportunity to select the same index is or was available to the public on terms which provide or provided that the opportunity to select the index is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the assurance company concerned, as available generally to any person falling within the terms of the opportunity.

(7) The requirements of this subsection are that—

(a) the assurance company concerned does not subject any person to any treatment in connection with the opportunity which is different or more burdensome than any treatment to which any other person is or may be subject, and

(b) where the terms of the opportunity referred to in subsection (5) include terms—

(i) which set out the capital requirement of the opportunity and this requirement is identified to the public in the marketing or other promotional material published by the assurance company at the time the property is available to be selected, and

(ii) indicating that 50 per cent or more by value of the property referred to in that subsection is or is to be land,

the amount any one person may invest in the policy shall not represent more than 1 per cent of the capital requirement (exclusive of any borrowings) of the opportunity as so identified.”,

“Assessment of appropriate tax where tax not deducted under section 730F.

730FA.—(1) Where section 730F(4)(b) applies then, notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts, this section shall apply for the purposes of regulating the time and manner in which any appropriate tax which remains to be accounted for and paid in connection with a chargeable event, which happened in the period commencing on 26 September 2001 and ending on 5 December 2001, in relation to a personal portfolio life policy shall be assessed, accounted for and paid.

(2) An assurance company shall for each personal portfolio life policy in respect of which it has not—

(a) deducted an amount equal to the amount of appropriate tax, for which the assurance company is liable to account, in accordance with subsection (3)(a)(i) of section 730F, or

(b) appropriated and realised sufficient assets to meet the amount of appropriate tax, for which the assurance company is liable to account, in accordance with subsection (3)(a)(ii) of section 730F,

make and deliver to the inspector to whom it is customary for the assurance company to make a return under section 951 a return on or before 31 December 2001 containing in each case—

(i) the name, address and, if appropriate, the registered office, of the policyholder,

(ii) the amount of the gain arising on the happening of the chargeable event in relation to the policy, including details of all amounts referred to in subsections (3) and (4) of section 730D which are relevant to the determination of the gain arising on the chargeable event in question,

(iii) the amount actually deducted in accordance with section 730F(3)(a)(i) or the amount actually realised in accordance with section 730F(3)(a)(ii),

(iv) the method of payment of the benefits under the policy,

(v) if payment was made to a person other than the policyholder, details of the name and address of that person, and

(vi) details of the property which is a linked asset in relation to the personal portfolio life policy.

(3) An assurance company which fails to deliver, within the time specified in subsection (2), the return referred to in that subsection or which fails to deliver such a return which is correct may, in addition to any penalty to which it may be liable, be made liable for the payment of any appropriate tax due in respect of a personal portfolio life policy to which that subsection applies which remains unpaid. An inspector may make an assessment on the assurance company to the best of his or her judgement of the appropriate tax so unpaid.

(4) Where, in connection with a chargeable event in relation to a personal portfolio life policy, an assurance company—

(a) fails to deduct an amount equal to the appropriate tax which should have been deducted in accordance with subsection (3)(a)(i) of section 730F, or

(b) fails to appropriate and realise sufficient assets to meet the full amount of appropriate tax for which the assurance company is liable to account for in accordance with subsection (3)(a)(ii) of section 730F,

then the policyholder or the person to whom the payment referred to in subsection (2) was made shall be liable for the payment of any appropriate tax due in relation to the personal portfolio life policy which remains unpaid. An inspector may make an assessment on the policyholder or the person concerned to the best of his or her judgement of the appropriate tax so unpaid.

(5) Where an inspector makes an assessment under subsection (3) or (4) it shall not be necessary to set out in the notice of assessment any particulars other than particulars as to the amount of appropriate tax to be paid by the assurance company or the policyholder, as appropriate.

(6) (a) An inspector may at any time amend or further amend an assessment made on a person under subsection (3) or (4) by making such alterations in or additions to the assessment as he or she considers necessary and the inspector shall give notice to the person of the assessment so amended or so further amended.

(b) After the end of a period of 6 years starting from 31 December 2001, no assessment shall be made under subsection (3) or (4) or no assessment made under either of those subsections shall be amended or further amended.

(7) For the purposes of making an assessment under subsection (3) or (4) or for the purposes of amending or further amending such an assessment an inspector may make such enquiries or take such action within his or her powers as he or she considers necessary—

(a) to satisfy himself or herself as to the accuracy or otherwise of the return referred to in subsection (2), or

(b) where no such return is made or an incorrect return is made, for the purposes of ascertaining the information which should have been included in such a return.

(8) Appropriate tax specified in an assessment made under subsection (3) or (4) or in an amended assessment made under subsection (6) shall be due and payable within one month after the issue of the notice of assessment or the amended assessment, as appropriate, subject to any appeal against the assessment.”.