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In general, qualifying policies - IPTM2020 - only give rise to chargeable events in restricted circumstances, namely if

• within 10 years from the making of the insurance, or, if sooner
• within three-quarters of the term for which the policy is to run if not ended by death or disability

any of the following events occur;

• surrender or assignment of all rights under the policy
• an ‘excess eventâ€� where a ‘periodic calculationâ€� shows a gain, see IPTM3555 and IPTM3560
• the end of the insurance year in which a ‘part surrender or assignment eventâ€� gives rise to a gain, see IPTM3555 and IPTM3585.

»Ê¹ÚÌåÓýapp full range of chargeable events described at IPTM3400 does, however, apply to a qualifying policy if

• it is converted into a paid-up policy within the same 10 year or three-quarter term timetable as above, or
• there is, except in relation to ‘transaction-related calculationsâ€�, a company interest in the policy rights, that is

- a company beneficially owns the policy

- the rights are held on trusts created by a company

- the policy is held as security for a company’s debt.

‘Transaction-related calculations� are explained at IPTM3580.

A policy is said to be ‘converted into a paid-up policyâ€� when there has been a permanent cessation of premium payments, other than where premium payments have ceased at the end of the contractual premium payment term. »Ê¹ÚÌåÓýappre cannot be any possibility of resumption of payment of premiums.

Any sum lent under an arrangement with the insurer to or at the direction of the policyholder on a policy or contract made after 26 March 1974 is treated as a part surrender of rights - see IPTM3545. Loans relating to qualifying policies are, however, excepted if they carry interest at a commercial rate.

Note that the relevant periods (first 10 years or three-quarters of the term, if sooner) are deemed to restart where a policy has a premium increase at any time other than under the terms of a policy option/feature. Further details on variations, substitutions and options are provided at IPTM8100 onwards.