Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Insurance Policyholder Taxation Manual

HM Revenue & Customs
, see all updates

Person liable to charge: non-UK resident trustees and foreign institutions

A special rule applies where

  • non-UK resident trustees would have been chargeable under the chargeable event regime - see IPTM3230 - had they been UK resident when the event took place, or
  • in relation to rights under a policy or contract,

    • a foreign institution beneficially owns a share in those rights
    • the rights are held for the purposes of a foreign institution, or
    • a share in the rights is held as security for a foreign institution’s debt.

The rule is to apply the anti-avoidance provision of Part 13 of Chapter 2 of ITA07 with certain modifications. This provision is designed to prevent avoidance of tax where an individual who is ordinarily UK resident benefits from a transfer of assets. HMRC offices must refer enquiries under this legislation to CAR Trusts & Estates (Technical) Bootle. See INTM600010 onwards.

The modifications are

  • in the case of non-UK resident trustees, to treat the gain as becoming payable to the trustees, and as if income arose to the trustees in the tax year in which the gain arises
  • in the case of a foreign institution, to treat the gain as becoming payable to the institution, and as if income arose to the institution in the tax year in which the gain arises.

Foreign institution means a company or other institution resident or domiciled overseas. This rule is at ITTOIA05/S468.

Further reference and feedback IPTM1013