Foreign insurance gain with policy loan

Posted Thu, 28 Sep 2023 17:30:26 GMT by Man Lung Lee

Hi, I purchased a foreign Universal life insurance plan in 2019 in Hong Kong which I plan to surrender in 2024. Now I've moved to UK since 2022. I have applied the premium financing loan with loan amount USD215K Insurance initial Premium: USD250K Loan size : USD215K Initial Principal: USD 35K Surrender value in 2024: USD300K Annual loan interest: USD4,5K 5 year paid interest: USD 22.5K May I know when I calculate the taxable gain at surrender , can I deduct the total paid interest (5 years)? Which formula is correct? taxable gain (USD) = 300K - 215K - 35K - 22.5K or taxable gain (USD) = 300K - 250K

Posted Tue, 03 Oct 2023 10:44:17 GMT by HMRC Admin 10 Response

Hi
Please see Gains on foreign life insurance policies (Self Assessment helpsheet HS321) - GOV.UK (www.gov.uk).

Posted Tue, 03 Oct 2023 11:10:27 GMT by Man Lung Lee

Dear HMRC admin, Thanks for your reply. I have checked the HS321 and I can't find any information related to paid interest. Can I simply deduct the paid interest from the gain?

Posted Fri, 06 Oct 2023 15:54:39 GMT by HMRC Admin 25 Response

Hi Man Lung Lee,
HMRC cannot comment on future events as legislation may change.
Thank you.

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