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Where Taxpayers and Advisers Meet

gain on life insurance policy towards pension relief?

siashjoe1
Posts:2
Joined:Thu May 16, 2024 9:57 am
gain on life insurance policy towards pension relief?

Postby siashjoe1 » Thu May 16, 2024 10:07 am

Hello,

I have a question regarding a gain made on a foreign life insurance policy

I recently surrendered my policy and received the lump sum. The gain (adjusted for TAR) will go towards my taxable income for this year

Can I use this amount as part of my overall annual allowance for pension contributions?

Any information gratefully received

Thank you

AGoodman
Posts:1776
Joined:Fri May 16, 2014 3:47 pm

Re: gain on life insurance policy towards pension relief?

Postby AGoodman » Fri May 17, 2024 10:41 am

I think you are confusing two different limits.

The annual allowance is fixed at £60,000 except for very high earners.

Separately, your contributions are also capped at your employment income for the year (or £3,600 if higher). An insurance gain will not be counted as employment income.

siashjoe1
Posts:2
Joined:Thu May 16, 2024 9:57 am

Re: gain on life insurance policy towards pension relief?

Postby siashjoe1 » Fri May 17, 2024 1:10 pm

Thank you Agoodman,

I understand about the limits I just wanted to use the gain money as part of my income so I could use more of the allowance.

But as I understand it foreign gains on life insurance policies are not considered as UK earnings?

Thanks

AGoodman
Posts:1776
Joined:Fri May 16, 2014 3:47 pm

Re: gain on life insurance policy towards pension relief?

Postby AGoodman » Tue May 21, 2024 12:21 pm

Correct


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