Schedule 34 - Policies of life insurance etc: miscellaneous amendments
Finance Bill
8:55 am
Mr John Healey (Economic Secretary, HM Treasury; Wentworth, Labour)
The measures in part 1 of the schedule ensure that, provided certain conditions are met, the group life policy will be entirely outside the scope of the special regime for taxing policyholders on the gains that they make on their life insurance policies. The aim of amendments Nos. 141 and 155 is to extend the scope of the exclusion to group policies providing for payment to partnerships on the death of the individual partners. The hon. Member for Arundel and South Downs has explained that the Law Society advocates the amendment. That is understandable, because the big professional partnerships—particularly lawyers and accountancy partnerships—would take advantage of the exclusion were it implemented.
Amendment No. 140 would replicate the Interpretation Act 1978. It is intended to help individuals who are covered under group life policies, which provide death benefits to their families, dependants and others. Group life cover is broadly in line with the cover provided within approved pension schemes. It is not intended or designed to cover payments, particularly commercial
arrangements, of the kind that the hon. Gentleman discussed. Policies in which the beneficiary on death is the partnership to which the deceased belonged are not within the category of group policies, and it is therefore inappropriate to widen the scope of the measure to include them.
I hope that the hon. Gentleman will withdraw the amendment; if not, I must ask my hon. Friends to reject it.