Oversea "single-premium" 5 years life savings insurance policy

I have the captioned policy from oversea since 2019 and will be expired early next year(2024). Since this is a relatively short term and single-premium policy, I have to withdraw all the money when it's expired. As such, I am keen to know how the tax is calculated for such an oversea policy. Here are a few questions that I have. -Will it be income tax or CGT? -If it's income tax, am I eligible to have the Time Apportionment and Top Slicing reliefs? I live in England since December of 2021. For example: Let say the gain is £14000. after time apportionment and top slicing relief, and before personal allowance, is the tax appropriately £700 based on my calculation? TAR : 14000 × ~2.5 years ÷ 5 years = 7000 TSR : 7000 ÷ 2 complete years = 3500 Tax : 3500 × 20% = 700 -If it's CGT, what other reliefs will be eligible and how they are calculated? P.S. This policy was purchased with financing(loan from bank), does it make a difference? Also, is the monthly loan interest tax deductible? Many thanks

Hi wongjtax3664,
It will not be Capital Gains Tax.
See guidance here: 
HS321 Gains on foreign life insurance policies (2023)
Thank you. 
 

Does that mean I am eligible to the Time Apportionment and Top Slicing reliefs? And the tax will be ~£700 afterwards?

Hi wongjtax3664
That will be for you to confirm based on the guidance given.
Thankyou.

Is the interest on the loan tax deductible?

Hi 
Yes, on maturity of the policy, you will receive a chargeable event certificate.
If the gain is more than £10,000.00, you will need to declare the gain in a Self Assessment Tax return.
If the gain is less, you will need to send the certificate to HM Revenue and Customs.
Thank you. 

hi I came across this thread and wanted to get more information for the mention of "If the gain is more than £10,000.00, you will need to declare the gain in a Self Assessment Tax return." and "If the gain is less, you will need to send the certificate to HM Revenue and Customs." Thanks in advance

Hi,

You can see guidance here:

Gains on foreign life insurance policies (Self Assessment helpsheet HS321)

Thank you

My bank told me that they wouldn't have an Chargeable Event Certificate to summarize the capital(bank loan plus personal capital), total interest paid(to bank), gross and net gain, etc. when the policy matures. They said that all the details can be found in the monthly bank statements. So, can I use them instead when doing self assessment ? The total number of pages all together will be over 100 pages. Is that ok？ Also, the bank and the insurance company are two different companies. Does it matter？

Hi
As it is foreign income you will need to complete a tax return. It is the insurance company who will issue the certificate as they need to confirm the gain and number of years involved. Your  previous bank statements wont show this.

So far, I have only received a policy maturity notice saying only that how much the gross return is by the end of this month. However, this amount is misleading as the loan from the bank, monthly loan interest and my own premium paid are not deducted yet. Since the insurance company is Chinese Hong Kong based and insurance policy is non-taxable in Hong Kong, will I really receive such a chargeable event certificate？

Hi wongjtax3664,
You should do, and you will need to discuss this with the insurance firm.
Thank you. 
 

By any chance, would you know what's the official English name of the Chargeable Event Certificate of insurance policy in Hong Kong? Or something equivalent?

Hi wongjtax3664,
Sorry no.
You would need to speak to the insurance company.
If you look at HS321 on gov.uk to give this to the insurance company this might make it clearer for them.
HS231 Doctors' expenses (2020)
Thank you. 

In which sections/questions of the self assessment online form I can specify the Time Apportion Relief and provide details if necessary ?

Hi, wongjtax3664,
Please refer to guidance at HS321 Gains on foreign life insurance policies (2024) on how to report this.
Thank you.