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Where Taxpayers and Advisers Meet

Calculation of gains - foreign life insurance

julz.ray
Posts:8
Joined:Tue Sep 05, 2017 1:56 pm
Calculation of gains - foreign life insurance

Postby julz.ray » Fri Sep 07, 2018 4:40 pm

Hi everyone,

I have a question relating to the calculation of the tax I owe on a partial buy-back (part surrender?) of my French life insurance policy. I am a UK resident for tax purposes.

- the French life insurance company sent me a certificate with the amount of "gains", which in France is considered to be the proportion of my withdrawals which represent interest gains. When I calculate what I owe to HMRC, should I take this as a basis, or the total premium paid?

- I paid premiums in at different point in time (not only upon opening the policy) - should the 5% relief and the time-apportioned reductions be calculated for each premium payment? i.e. if I paid 100 euro in 2010 and 200 euro in 2015, then the relief will be (5% x 7 x 100) + (5% x 2 x 200) or 5% x 7 x (100+200)?

Thanks a lot for your help and have a lovely day!
Julie

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Calculation of gains - foreign life insurance

Postby maths » Fri Sep 07, 2018 4:50 pm

(5% x 7 x 100) + (5% x 2 x 200)

julz.ray
Posts:8
Joined:Tue Sep 05, 2017 1:56 pm

Re: Calculation of gains - foreign life insurance

Postby julz.ray » Fri Sep 07, 2018 5:05 pm

Thanks a lot!

And do you know if I should calculate the gains based on the total premiums paid or the interests earned? (it's a part surrender on a multi-premium policy)

Best,

Julie

julz.ray
Posts:8
Joined:Tue Sep 05, 2017 1:56 pm

Re: Calculation of gains - foreign life insurance

Postby julz.ray » Fri Sep 07, 2018 6:03 pm

Apologies, I have another question:

Does the time-apportioned relief takes into account when the different premiums were paid?

Say I opened my policy in 2000 and put in 500 E.

I moved in the UK in 2010.

I put in 1000 E in the policy in 2012.

I did a part surrender this year.

Then is the time-apportioned relief (2017-2012)/(2017-2010) even if most of the premiums were paid in when I was a UK resident?

Thanks a lot again for your precious help!

Julie

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Calculation of gains - foreign life insurance

Postby maths » Sun Sep 09, 2018 6:35 pm

Gains are based on a comparison of 5% of premiums paid and the value of partial surrenders.

Time apportioned relief applies based on number of days residency irrespective of date of premium payments.


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