Overview

This bill proposes tax relief on medical insurance premiums for UK residents aged 65 and over. The relief is subject to several conditions relating to the type of insurance contract, the insurer, and the reasonableness of the premiums. The aim is to alleviate the financial burden of healthcare costs for pensioners.

Description

The bill introduces tax relief for individuals aged 65 or older residing in the UK who pay medical insurance premiums. Relief applies if the payment isn't funded by another person and isn't already covered by other tax provisions. The contract must insure individuals aged 65 or older residing in the UK, or a married couple where at least one is 65 or older and UK resident. The payer can deduct income tax at the basic rate from the payment. The insurer must be approved by Her Majesty's Revenue and Customs (HMRC), and the contract must meet specific conditions regarding its duration, benefits offered, and connection with other contracts. HMRC has the power to certify contracts and has the authority to make regulations covering various aspects of the scheme, including the form and manner of claims, information requirements for insurers, and appeals procedures.

Eligible Contracts

To qualify for tax relief, the insurance contract must be approved by HMRC, have a term no longer than one year, not be linked to other contracts, offer only approved benefits, and meet one of three conditions: (1) certification by HMRC; (2) conformity to a standard form approved by HMRC; or (3) conformity to a variation of an approved standard form also approved by HMRC. Insurers must meet specific criteria including lawful operation within the UK or another member state.

Certification and Appeals

HMRC has the authority to certify contracts, revoke certifications, and provide for appeals against their decisions. The bill outlines the criteria for contract certification.

Government Spending

The bill will likely result in a reduction in government revenue due to the tax relief offered. The exact financial impact is difficult to predict without knowing the number of eligible individuals and the average premiums claimed. The financial effect will depend on take up of the scheme and the individual premiums claimed.

Groups Affected

• Pensioners (aged 65+): Potentially benefit from reduced tax burden on medical insurance costs.
• Private Medical Insurance Companies: May experience increased demand for their services.
• HMRC: Responsible for administering the scheme, including approvals, certifications, and handling appeals.
• UK Government: Will face reduced tax revenue as a result of the tax relief.

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