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

H. Miscellaneous
50) Can the decision to significantly modify (see Question 29) a policy
be reversed?
A significant modification will be ignored if the effect of that modification is
cancelled within 3 months of the day the modification occurred. This
nullification of the modification will not in itself constitute a modification but is
treated as if this change never took place. The policy reverts back to its
original state prior to this change.
If instead of a cancellation described above, an individual decides to modify
the policy again so that for example their premium limit is not breached but is
reduced to the balance of £3,600 relief available, this is treated as another
modification. The loss of qualifying status cannot be reversed in these
circumstances (see Question 10) and so the rectification provisions will not
apply.
51) How are premiums paid under multiple ownership policies treated
for the purposes of each beneficial owner’s annual premium limit?
Where there is more than one beneficial owner of a qualifying policy the
premiums payable under the policy will count in full towards each beneficial
owner’s premium limit of £3,600.
Link to Example 11