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Insurance Premium Tax IPT
This is a tax on the premium you pay for most general insurance policies. It was initially introduced at 2.5 on 1st October 1994 but was increased in stages to the current rate of 5 in July 1999. Insurance Premium Tax IPT applies to general insurance policies where the risk is located in the UK.
It includes motor household medical including long-term cover income replacement travel and other protection cover. Life insurance policies and long-term plans with an investment element do not attract IPT. Depending on how you buy your insurance you may have to pay more tax. A higher rate of 17.5 was introduced in April 1997 which applies to all travel insurance and also to insurance policies purchased as add-ons to other products for example on an extended warranty when you buy a television you will pay IPT at the higher rate. See alsoMoneyextra.coms Tax Centre More information about IPT can be found on the Customs and Excise website and the public notice IPT1 Insurance Premium Tax ©Moneyextra.com Moneyextra.com recommends you take independent financial advice before acting on any article 2009-02-17 00:00:00 © Moneyextra.com