Part 4Savings and investment income

Chapter 9Gains from contracts for life insurance etc.

Reductions from gains

C1528Reduction in amount charged: non-UK resident policy holders

1

The gain from a foreign policy of life insurance or foreign capital redemption policy is reduced for the purposes of this Chapter if the policy holder was not UK resident throughout the policy period.

2

The amount of the reduction is the appropriate fraction of the gain.

3

The appropriate fraction is—

ABmath

where—

  • A is the number of days on which the policy holder was not UK resident in the policy period, and

  • B is the number of days in that period.

4

In this section and section 529 (exceptions from this section), “the policy period” means the period for which the policy has run before the chargeable event occurs.

5

If the gain is from a policy of life insurance which is a new policy in relation to another policy, for the purposes of subsection (4) the new policy is taken to have run—

a

from the issue of the other policy, or

b

if it also was a new policy in relation to an earlier policy, from the issue of the earlier policy,

and so on.

6

In subsection (5) “new policy” has the meaning given in paragraph 17 of Schedule 15 to ICTA.

7

This section is subject to section 529.