The tax representative of an overseas insurer is required to report chargeable events and gains on ‘relevant insurances’ - see IPTM9030 - to policyholders and HMRC in accordance with the rules in ICTA88/S552.
The information that must be reported to policyholders and the
circumstances in which it must be supplied are the same as for UK
insurers. The guidance in
IPTM7105 to
IPTM7140 also applies to the duties of
tax representatives, with ‘insurer’ read as ‘tax
representative’ throughout`.
IPTM7105 to
IPTM7115 cover the person and address to
which certificates should be sent and
IPTM7140 gives the time limits for doing
so.
IPTM7120 to
IPTM7135 give the information to be
provided on certificates.
IPTM7205 and
IPTM7210 cover corrections and errors in
certificates.
IPTM7300 to
IPTM7405 give guidance on the types of
chargeable events that can arise.
IPTM7500 onwards covers calculation of
gains and
IPTM7700 onwards covers the personal
portfolio bond rules.
IPTM9220 gives guidance where a policy
is not denominated in sterling.
The following three aspects relate only to policies from
overseas insurers.
The tax representative is required to report whether income tax
would be treated as paid on the assumption that the liable person
is an individual, and if so the amount of the tax.
In practice however, where the policy is from an overseas
insurer it will almost always be the case that no income tax is
treated as paid on the gain. The main exception is where the policy
or contract was taken out before 18 November 1983 and has not been
varied since then to increase the benefits secured or extend the
term. Income tax is treated as paid on gains from such policies and
this should be reported on the chargeable event certificate.
Where the holder of a policy from an overseas insurer was not
resident in the UK for part of the policy period, the taxable gain
is reduced by a proportion relating to the time that the
policyholder was non UK-resident - see
IPTM3730.
However, a tax representative
must report the full amount of the gain on the
chargeable event certificate. A tax representative is unlikely to
hold the information that would enable it to apportion the gain and
should not attempt to do so. The self assessment tax return
guidance tells a policyholder how to apportion the full gain shown
on the certificate if necessary.
A tax representative is required to calculate and report the full number of years for top-slicing relief, as explained in IPTM7560. Where a policyholder was not resident in the UK for part of the policy period, the number of years is reduced to reflect this - see IPTM3830 - but the tax representative must not report the reduced number, even if it has the information to calculate it. The self assessment tax return guidance also tells a policyholder how to work out this reduced number.
| Further reference and feedback | IPTM1013 |
