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Removal of Life Assurance Premium Relief

On 6 April 2015 HM Revenue and Customs removed Life Assurance Premium Relief (LAPR).

What is LAPR?

LAPR was an income tax relief applied to regular premiums paid into certain qualifying life insurance policies that were issued on or before 13 March 1984. LAPR was 12.5% of regular premiums since 1989. Premium increases or incremental payments since 13 March 1984 were not eligible for LAPR.

What products were impacted?

Products impacted by the removal of LAPR included Scottish Widows With-Profit endowment, Whole of Life With-Profit and Low Cost Endowment type policies.

What did Scottish Widows do as a result of this change?

Scottish Widows agreed to fund this 12.5% on behalf of customers until their policy ends.

Will my policy change or do I need to make any decisions due to the removal of LAPR?

No. With Scottish Widows funding what was LAPR, customers with these qualifying policies continued to pay the same premium, had the same sum assured, retained their qualifying policy status and there was no change to the customer’s tax position. No action was required by customers or financial advisers.

Please note that the decision to fund this tax relief was specific and unique to LAPR and the impacted qualifying policies. It set no obligation on us to fund any future changes to tax relief on other products.