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United Friendly Insurance plc v IRC (Chancery Division)

Life Assurance Premium Relief. Reg. 10(6), Income Tax (LAPR) Regulations 1978.

Under this system of relief, withdrawn on 13 March 1984, individual policyholders deducted income tax from life assurance premiums paid, and the life office then recovered such amounts (“the deficiencies”) from the Inland Revenue. In this case there was a substantive issue concerning whether certain policies were written before of after 13 March 1984 – deficiencies had been recovered in respect of such policies between 1984 and 1991, and the Inland Revenue now claimed that overpayments of relief had been made. The Inland Revenue was out of time to raise an assessment for such overpayments. A preminary question for determination, raised by originating summons, was whether regulation 10(6) of the 1978 Regulations permits the Inland Revenue to recover any such overpayments without raising an assessment.

Held: regulation 10(6) does confer on the Inland Revenue an immediate enforceable right to recover overpayments made by it, if it succeeds on the substantive issue.

David Goy QC and Philip Baker appeared for the life office

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