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One of the fundamental features of insurance is that all those wishing to be insured must contribute to the ‘common fund� a fair and equitable premium.

»Ê¹ÚÌåÓýapp concept of ‘premiumâ€� is important in IPT because it forms the basis of the tax. Section 49 of the Finance Act 1994 states:

Tax shall be charged on the receipt of a premium�

Section 50(2) describes the chargeable amount as:

� such amount as, with the addition of the tax chargeable, is equal to the amount of the premium.

»Ê¹ÚÌåÓýapp purpose of this section is to enable you to determine what the amount of the premium is.