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Where Taxpayers and Advisers Meet

Foreign Life Insurance Policy

CG
Posts:202
Joined:Wed Aug 06, 2008 3:33 pm
Foreign Life Insurance Policy

Postby CG » Tue May 25, 2021 4:53 pm

My client is Japanese but has lived in the UK for many years and completes a UK Tax Return. She is the named beneficiary on a Life Insurance policy that her Japanese mother had taken out in Japan. She has received the money which will all be used paying for the funeral and related arrangements in Japan. No money will be brought back to the UK.

Does this give rise to any UK tax liability?

Many thanks for any advice here.

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

Re: Foreign Life Insurance Policy

Postby maths » Wed Jun 16, 2021 5:56 pm

I assume the client was UK domiciled or deemed domiciled at the time of death of her mother ie the remittance basis will not apply.

I assume the policy was not settled on trust but was in the absolute ownership pf your client.

The policy as a foreign policy is not a qualifying policy and therefore on death a so-called chargeable event will occur; any gain arising will be subject to UK income tax irrespective of how the proceeds are spent and/or whether no monies are brought to the UK.


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