FAQ's – Life Insurance – Qualifying Policies - HM Revenue & Customs

32) What happens where a policy issued before 21 March 2012 is
significantly modified (see Question 26 above) on or after 21
March and the annual premium limit is exceeded following the
modification?
Where a qualifying policy issued before 21 March 2012 is significantly
modified on or after 21 March 2012 and is not an excluded policy (as
described in Question 31 above) that policy will become a restricted relief
qualifying policy (RRQP) from the date of the modification if as a result of the
modification the annual premium limit of £3,600 is exceeded.
The full value of premiums payable in respect of the period from
commencement to the date of the modification (or, if later, 5 April 2013) will
attract relief. Any premiums payable from the date of modification (or, if later,
5 April 2013) will be taken into account for an individual’s annual premium
limit. The individual’s allowable premiums will therefore be restricted to a
maximum of £3,600 per annum with effect from the date of modification (or, if
later, 5 April 2013) or whatever headroom is left from that annual limit once
the individual’s other qualifying policies issued before the modification are
taken into account.
E. Assignments
33) What happens when the rights (or any share in any rights) under a
qualifying policy are assigned to someone else?
If the rights (or any share in the rights) under a qualifying policy are assigned
to someone else before 6 April 2013 there will be no change in the status of
the policy in the hands of the assignee so it will remain a qualifying policy.
If the rights (or any share in the rights) under a qualifying policy are assigned
to someone else on or after 6 April 2013 the policy will automatically become
a non-qualifying policy apart from certain exceptions (see Question 34 below).
34) Do all assignments of rights (or any share in any rights) under a
qualifying policy on or after 6 April 2013 change the status of the
policy to non-qualifying?
No, certain assignments are excluded from this rule:
assignments as part of a divorce settlement
assignments as a result of a court order
assignments as security for a debt or on discharge of a debt
assignments between husband and wife and between civil partners
assignments into trust