Under the Personal Income Tax Act (PITA), part of the Personal Reliefs prior the Finance Act 2021, were allowances for , “annual amount of any premium paid by the individual during the year preceding the year of assessment to an insurance company in respect of insurance on his life or the life of his spouse, or of a contract for a deferred annuity on his own life or the life of his spouse”.
The Finance Act 2021 has specifically removed from the provision, the clause, “or of a contract for a deferred annuity on his own life or the life of his spouse”, which might imply (in form) that premiums paid for deferred annuity contracts are now no longer allowed as reliefs or deductible expenses.
In substance however, one may argue that since the term ‘Premium’ includes both the purchase price of a life insurance policy AND, the payments required by an insurer to provide deferred annuity cover; and both premiums are paid to insurance companies, then this relief (on premiums paid for deferred annuity contracts) is still covered under the current provision of the law.
For further enquiries, discussion, advisory or help around complying with these new laws, please send us an email via clients@vi-m.com. You will be able to access all our explanatory write-ups on each of the major changes to the laws, brought about by the Finance Act 2021 and the practical ways in which they will affect taxpayers going forward, under our website group link – https://www.vi-m/category/Finance-Act-2021.