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

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HMRC would normally consider the onset of a serious illness, disability or serious mental health condition at the same time the declaration was due that made the individual incapable of making that declaration a reasonable excuse. We will not accept an excuse where an individual has not made a reasonable effort to meet the deadline such as for example, forgetting about the deadline. The following reasons are also unlikely to be accepted by HMRC as a reasonable excuse: Pressure of work Lack of information HMRC/Insurance company did not remind me Ignorance of the law 46) What is meant by unreasonable delay? The following examples should assist in determining what is meant by unreasonable delay: (a) No unreasonable delay Kate was unable to make a declaration on time due to the death of a family member and, from the information available, HMRC accepted that the bereavement was a reasonable excuse. Kate made a declaration two weeks after the funeral. As Kate had a reasonable excuse for not making the declaration on time, HMRC judged that, based on the facts of this case, the delay in correcting it was reasonable. The reasonable excuse provision applies so that the policy is reinstated as a qualifying policy or restricted relief qualifying policy from the date that it was issued or if relevant the significant modification (see Question 29 above) or assignment was made as appropriate. (b) Unreasonable delay Lisa was unable to make a declaration on time due to the death of a family member and, from the information available, HMRC accepted that the bereavement was a reasonable excuse. However, Lisa had still not made a declaration for a few months after the bereavement and did not notify her policy provider (or HMRC) of any other changes to her circumstances.
Although Lisa had a reasonable excuse for not making a declaration on time due to the death of a family member, based on the facts of this case, by waiting so long to correct that failure meant that she had failed to take reasonable care and so the delay became unreasonable. Lisa cannot take advantage of this provision, so the policy is treated as non-qualifying from the date of issue or if relevant the date of the significant modification (see Question 29 above) or assignment as appropriate. 47) Does HMRC provide a form on which a declaration may be made? No, insurance providers may provide the necessary forms for a declaration. 48) What information is required on the declaration? The following information will be required: Full name Address National insurance number (NINO) Date of birth Whether the individual is a beneficiary under another qualifying policy A statement that the individual has not exceeded the annual premium limit of £3,600 The policy identification number of the policy The date the policy was issued Where the policy is one issued before 6 April 2013 and is significantly modified on or after 6 April 2013, confirmation of whether the policy was issued and is being maintained for the sole purpose of ensuring that the borrower under an interest-only mortgage will have sufficient funds to repay the capital lent under the mortgage. Details of a significant variation (see Question 30 above), including the date from which it applies, of a policy. The date of assignment and the full name and address of the person to whom the policy was assigned if the assignment is one of those listed in Question 34. The full name and address of the previous beneficiary if the assignment is one of those listed in Question 34. Date of declaration. 49) What happens if I make an incorrect/false declaration? If you make a false/incorrect declaration your policy will be incorrectly treated as a qualifying policy when a chargeable event gain arises. If you make an inaccurate self-assessment return or fail to make a self-assessment return as a consequence of this incorrect treatment when you are liable to tax you will be required to pay the full amount of tax due together with interest and penalties for that inaccuracy or failure.
Page 1 and 2: Contents Introduction Chapter 1 - F
Page 3 and 4: Policies made in the period 6 April
Page 5 and 6: 13) How are the non-qualifying poli
Page 7 and 8: Link to Example 4 22) How are polic
Page 9 and 10: they are subjected to significant m
Page 11 and 12: 35) What happens when an assignment
Page 13: 44) What happens if the 3 month tim
Page 17 and 18: Chapter 2 Examples in support of fr
Page 19 and 20: Each policy has annual premiums pay
Page 21 and 22: No other qualifying policies are he

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

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