Finance Act 1989

54Relief

(1)This section applies where—

(a)on or after 6th April 1990 an individual makes a payment in respect of a premium under a contract of private medical insurance (whenever issued),

(b)the contract meets the requirement in subsection (2) below as to the person or persons insured,

(c)at the time the payment is made the contract is an eligible contract,

(d)the individual making the payment does not make it out of resources provided by another person for the purpose of enabling it to be made, and

(e)the individual making the payment is not entitled to claim any relief or deduction in respect of it under any other provision of the Tax Acts.

(2)The requirement mentioned in subsection (1)(b) above is that the contract insures—

(a)an individual who at the time the payment is made is aged 60 or over and resident in the United Kingdom,

(b)individuals each of whom at that time is aged 60 or over and resident in the United Kingdom, or

(c)two individuals who are married to each other at that time, at least one of whom is aged 60 or over at that time, and each of whom is resident in the United Kingdom at that time.

(3)If the payment is made by an individual who at the time it is made is resident in the United Kingdom (whether or not he is the individual or one of the individuals insured by the contract) it shall be deducted from or set off against his income for the year of assessment in which it is made; but relief under this subsection shall be given only on a claim made for the purpose, except where subsections (4) to (6) below apply.

(4)In such cases and subject to such conditions as the Board may specify in regulations, relief under subsection (3) above shall be given in accordance with subsections (5) and (6) below.

(5)An individual who is entitled to such relief in respect of a payment may deduct and retain out of it an amount equal to income tax on it at the basic rate for the year of assessment in which it is made.

(6)The person to whom the payment is made—

(a)shall accept the amount paid after deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made, and

(b)may, on making a claim, recover from the Board an amount equal to the amount deducted.

(7)The Treasury may make regulations providing that in circumstances prescribed in the regulations—

(a)an individual who has made a payment in respect of a premium under a contract of private medical insurance shall cease to be and be treated as not having been entitled to relief under subsection (3) above; and

(b)he or the person to whom the payment was made (depending on the terms of the regulations) shall account to the Board for tax from which relief has been given on the basis that the individual was so entitled.

(8)Regulations under subsection (7) above may include provision adapting or modifying the effect of any enactment relating to income tax in order to secure the performance of any obligation imposed under paragraph (b) of that subsection.

(9)In this section—

(a)references to a premium, in relation to a contract of insurance, are to any amount payable under the contract to the insurer, and

(b)references to an individual who is resident in the United Kingdom at any time include references to an individual who is at that time performing duties which are treated by virtue of section 132(4)(a) of the Taxes Act 1988 as performed in the United Kingdom.