View more on these topics

Life policyholder taxation

7. LIFE POLICYHOLDER TAXATION



Legislation will be included in Finance Bill 2001 to clarify and simplify the tax treatment of transfers of shares in life insurance products. New measures will also be introduced to require insurance companies to give details of life policy gains to their policyholders. The new rules on transfers will have effect for policy years (see &#39Timing&#39 below) beginning on or after 6 April 2001 but insurers will have until 6 April 2002 to put in place the systems they need to be able to tell their policyholders about their gains.

The new rules will:


  • make the tax treatment clearer where part of the rights in a life insurance policy are transferred by ensuring that


  • the tax charge on transfers of part of the rights under an insurance policy or contract will be determined by reference to the part of the rights transferred and the tax charge on such transfers will be the same in England and Wales as it is in Scotland,


  • the person who gives up the interest will be liable for any tax that is due on the transfer,


  • transfers for no consideration of part of the rights under a life policy or contract will no longer be liable to income tax; and


  • make it easier for policyholders with a taxable gain to complete their self assessment return for transfers made on or after 6 April 2002 because insurers will tell their policyholders whether they have made a gain for income tax purposes on their life policy or contract and the amount of that gain.




Recommended

Corporation tax

10. CORPORATION TAX Rates from 1 April 2001 have been held at their current levels which means that: The small companies&#39 rate of corporation tax will continue to be at 20%, and will apply where a company has profits of between £50,000 and £300,000. The full rate of corporation tax will continue to be at […]

Amanda Davidson – Partner IFA Holden Meehan

For IFAs traditionally dealing with the upper end of the market there was little to get excited about in this year’s Budget. Even with over inflationary increases to capital gains tax (up to £7,500), inheritance tax allowances (to £242k) and the earnings cap (to £95,400) looking generous, a longer memory reminds us that these allowances […]

Royal & Sun Alliance may sell off its life business

Royal & Sun Alliance is understood to be evaluating its life book with a view to selling the business. The composite insurer is also understood to be considering taking a similar step with its general insurance arm. Investment banks have been invited by RSA to comment on the value of the life book as a […]

Paul Smee – Director General AIFA

The Chancellor may not have dumbed down but he has prudenced down. Only three uses of the word, after double digits last year. Nothing in the speech really ignited my professional interest. But there was a conspicuous omission; I was hoping for a move, however tentative, on annuities. After all, the annuity trap is especially […]

Life cover for life

Jennifer Gilchrist Proposition Lead – Design, Royal London When someone mentions whole of life plans, most people will think of a niche product that serves as an inheritance tax planning tool for high-net-worth clients. And it’s really not surprising they’ve been pigeonholed in that way because before the arrival of RDR in 2013, that’s more […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com