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Posted Mon, 15 Aug 2022 11:33:26 GMT by Ysom Aa
I hold a Unit Linked Insurance Product ( ULIP) abroad in India which is a life insurance product with an investment component. The money is invested in units/funds. In India chargeable gain on ULIP is liable for 10% Long Term Capital Gain Tax with Indian Rupees 100000 (approx. £1000) as Capital Gain Tax allowance. I would like to surrender ULIP. Kindly let me know whether chargeable gain on ULIP will be considered as part of Capital Gain allowance or as normal income.
Posted Tue, 16 Aug 2022 08:01:12 GMT by HMRC Admin 17

Please note that chargeable event gains on foreign life insurance policies are subject to income tax, rather than capital gains tax. 

You can't therefore set your Capital Gains Tax allowance against the ULIP chargeable event.

The gain should be reported in the Foreign pages (SA106) your self assessment tax return, under the heading ‘other overseas income and gains’.   

See links:

HS321 Gains on foreign life insurance policies (2020)   .

Thank you.

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