Revenue Note for Guidance

Section 124B Certain premiums of life assurance

Summary

This section provides for a levy of 1% on life assurance premiums. For each quarter, commencing with the quarter ending on 30 September 2009, an insurer must deliver to the Revenue Commissioners a statement showing the assessable amount for the insurer for the quarter. The statement must be accompanied by the amount of stamp duty payable. The assessable amount due in the quarter ending 30 September 2009 is that as is comprised of premiums received on or after 1 August 2009 in respects of contracts of insurance whenever entered into by an insurer.

Because the duty is a stamp duty other appropriate provisions of this Act apply, in particular:

section 14(3) which enables the Revenue Commissioners to mitigate penalties payable in respect of late payment of duty,
section 126B which enables an appeal against an assessment to duty (the internal review procedures set out in Statement of Practice SP-GEN/2/99 (Revised January 2005) also apply), and
section 152 which enables the Revenue Commissioners to refund duty in certain circumstances – but see also section 159A as regards the time limit for making a refund claim and section 159B as regards interest that may be payable on such refunds.

Details

(1) “assessable amount” means the gross amount received by an insurer by means of premiums in a quarter for policies of insurance in the classes of insurance listed below and referred to in Annex 1 (to Directive 2002/83/EC of the European Parliament and of the Council of 5 November concerning life assurance) to the extent that the risks to which those policies of insurance are located in the State being risks deemed* to be located in the State in accordance with section 61 of the Stamp Duties Consolidation Act 1999 (but excluding amounts received in respect of pension business and amounts received in the course of or by means of reinsurance):

Class I - Life assurance and contract to pay annuities on human life.
Class II - Contracts of insurance to provide a sum on marriage or on the birth of a child.
Class III - Class I policies which are linked to investment funds.
Class IV - Permanent health insurance.
Class V - Tontines i.e. associations of subscribers which are established to benefit the beneficiaries of a subscriber on the death of that subscriber.
Class VI - Capital redemption operations i.e. in return for a single (or periodic) payment agreed in advance, the policy holder will have a right to a specified sum for a specified period in the future.

*The risk is deemed to be located in the State if the policyholder has his or her habitual residence in the State, or where the policy holder is a legal person other than an individual, or if the policy holder’s head office or branch to which the policy relates is situated in the State.

“branch “ means an agency or branch of a policy holder or any permanent presence of a policy holder in the State even if that presence does not take the form of an agency or branch but consists merely of an office managed by the policyholder’s own staff or by a person who is independent but has permanent authority to act for the policyholder in the same way as an agency.

“due date” for each “quarter” is —

(a) 25 April, for the quarter ended 31 March,

(b) 25 July, for quarter ended 30 June,

(d) 25 January, for the quarter ended 31 December.

“insurer” means —

(e) a person who is the holder of an assurance licence under the Insurance Act 1936,

(f) the holder of an authorisation within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994), or

(g) the holder of an official authorisation to undertake insurance in Iceland, Liechtenstein or Norway, pursuant to the EEA Agreement within the meaning of the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by all subsequent agreements to that Agreement, who is carrying on the business of life assurance in the State.

“premium” takes its meaning from the Insurance Act 1936 and means “any money or money’s worth payable or paid to any person who carries on an assurance business and who in consideration of such money or money’s worth undertakes any liability under any policy, bond or certificate”.

(2) An insurer shall in each quarter deliver to the Revenue Commissioners a statement, not later than the due date, showing the assessable amount for the insurer for the quarter.

(3) Stamp duty at a rate of 1% is chargeable on the assessable amount shown in the statement.

(4) The statement must be accompanied by the amount of stamp duty payable.

(5) Insurers must furnish to the Revenue Commissioners whatever information they require to ensure that the correct amount of duty is paid.

(6) Interest at the rate of 0.0219 per cent per day (by reference to section 159D) is chargeable, in addition to the duty, on the unpaid duty from the due date to the date the duty is paid. A penalty of €380 per day is also payable for each day the duty remains unpaid.

(7) Where during any accounting period but before a due date, an insurer ceases to carry on a business and another person acquires the whole, or substantially the whole, of the business, the insurer will not be obliged to make the statement to the Revenue Commissioners on the due date. Instead, the statement is required to be made by the successor. If the successor is already obliged to make a statement, the successor must include details of the business acquired in its return. Otherwise, the successor is obliged to make a statement in lieu of the insurer.

(8) This subsection enables the Revenue Commissioners to enforce delivery of the statement.

Relevant Date: Finance Act 2014