IPTM7515 - Calculation of gains: full surrender, maturity, death or whole assignment: related policies
A new policy is related to an old policy if it is issued:
- in substitution for the old policy, or
- on the maturity of the old policy following the exercise of an option in the old policy.
Two policies are 鈥榬elated policies鈥� if one is related, directly or indirectly, under this definition to the other. So, if policy A is related to policy B and policy B is related to policy to C, then policies A, B and C are all related policies.
Although the definition of 鈥榬elated policy鈥� is derived from ICTA88/SCH15/PARA17, it applies to all life insurance and capital redemption policies, not just qualifying policies.
Where an old policy is replaced by a new related policy, there will be a surrender or maturity chargeable event.