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HMRC internal manual

Insurance Policyholder Taxation Manual

Overseas insurers: release from requirement to appoint a tax representative: post-5 April 2000 policies and contracts: assignments for money or money’s worth

In obtaining the release from the requirement to appoint a tax representative, aninsurer gives an undertaking to calculate and report the gain on any chargeable eventunless it is satisfied that no gain arises. This includes a whole assignment of a policyor contract for money or money’s worth. IPTM7510 to IPTM7530 give the formula for calculating the gain on such anassignment and guidance on the various items in the formula.

To calculate the gain, or be satisfied that no gain arises, the insurer needs to know thevalue of the assignment. If it is aware that a policy or contract has been assigned formoney or money’s worth then it will normally know the value of the assignment or beable to obtain it from the policyholder. But if, exceptionally, the insurer is unable tocalculate the gain because it cannot ascertain the value of assignment then it may insteadreport all the other information that a policyholder needs to calculate the gain, as a UKinsurer is required to.

The information is

  • premiums or consideration paid on the policy or contract - see IPTM7130
  • total previous gains on calculation events - IPTM7135
  • total previous capital payments - IPTM7135, and
  • total value of parts of the policy that have previously been assigned - IPTM7135.
Further reference and feedback IPTM1013