NO TAX PROBLEMS TO RESULT FROM CRITICAL ILLNESS ADDITIONS

The UK Inland Revenue has clarified the implications of bringing existing critical illness policies into line with the Association of British Insurers’ (ABI) statement of best practice for critical illness cover providers. The tax office said that varying a policy through adding extra illnesses or medical conditions without any change in the premiums charged would not give rise to any tax problems. It had formerly said that such a change would probably be a significant variation for the purposes of relevant tax legislation. Nick Kirwan, chairman of the ABI’s critical illness working party, said that “this welcome change should help in the development of the critical illness insurance market, by assisting those insurers who wish to upgrade qualifying policies by covering additional medical conditions”.