Income Tax (Trading and Other Income) Act 2005

528 Reduction 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—

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.