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HMRC internal manual

Insurance Policyholder Taxation Manual

HM Revenue & Customs
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Overseas insurers: scope of reporting rules: insurers affected

An overseas insurer will come within the scope of the chargeable event reporting rulesif it, together with any connected insurers, conducts a certain minimum level of lifebusiness with UK residents.

Where gross premiums on relevant insurances are at least £1m

If the total amount or value of gross premiums paid to date on all relevant insurancesfrom the insurer, and any connected overseas insurer, is at least £1 million then theinsurer will be within the reporting regime. The meaning of ‘relevantinsurances’ and ‘gross premiums’ is given in IPTM9030.The meaning of ‘connected insurer’ is given below.

If the total was previously below £1 million but subsequently increases to at least £1million then the insurer will fall within the reporting rules with effect from threemonths from the date on which the £1 million threshold is crossed.

Most overseas insurers conducting business with UK residents will not need to make thiscalculation since it will be clear that the amount of business exceeds £1 million. But anoverseas insurer whose level of UK business is just below the limit should keep the amountunder review.

Where gross premiums on relevant insurances are less than £1m

If the total of gross premiums is less than £1 million, and has been since 6 April1999 when the reporting regime for overseas insurers was introduced, then there are noreporting obligations on the insurer.

Once the insurer is within the scope of the reporting rules because the total amount ofgross premiums has been at least £1 million on some date since 6 April 1999, it mustremain within the reporting rules unless total business with UK residents ceases orbecomes negligible. An insurer would not automatically drop out of the reporting regimesimply because the total of gross premiums fell below £1 million.

Where business with UK residents ceases or the total amount of gross premiums paiddeclines to a negligible amount, less than £100,000, say, the insurer may apply to HMRCfor release from the requirement to have a tax representative, which effectively takes itout of the reporting regime. This might happen where an overseas insurer has sold ortransferred most or all of its UK business to another insurer - see IPTM9200.

Where premiums under relevant insurances fall to nil or a negligible amount, IPTM9200 describes the procedure for applying to HMRC for arelease from the requirement to have a tax representative. A release in thesecircumstances will only be granted on the proviso that the insurer notifies HMRC if infuture the level of business again crosses the £1 million threshold.

Connected insurers

An overseas insurer is connected with another overseas insurer if theyare connected within the meaning given in ICTA88/S839 - see CG14580onwards. Insurers will be connected, for instance, if they are under common control.

If the total of premiums paid on relevant insurances is at least £1 million, thereporting rules will apply to any connected overseas insurer conducting business in theUK, even if the total of premiums paid on relevant insurances from that insurer is lessthan £1 million.

Further reference and feedback IPTM1013