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Posted Wed, 26 Apr 2023 15:19:45 GMT by Tax20
Hi Trying to work out if a lump sum I received, being the named beneficiary of a deceased non uk tax resident, foreign life insurance (I'm a UK tax resident), is taxable as income in the UK? The gain/taxable amount was declared to French tax authorities by the French life insurance company at the time of payout, but not taxed as under taxable threshold and due to when payments were made into life insurance. Does the same gain needs to be declared to the UK tax authorities? and then will be taxed in the UK? if so, this gain will have been declared in each country (as paid when applicable by french life insurance company directly) wouldn't this be double taxation? Thank you
Posted Sun, 14 May 2023 12:16:55 GMT by Moira S.
Hello Tax20, Literally in the same position as you. Have you found an answer to your question yet ? If so, could you share it with me please. Thanks.
Posted Mon, 15 May 2023 18:09:45 GMT by Brovos
Hello, I'm in the same position too. Here are the results of my research on the subject: As you can see by following the two links above, there are many special cases and caveats, but to summarise the main points: - The gains are taxed as income. - You can apply time apportioned reductions to reduce the amount of tax you need to pay if either the beneficiary (if the policy was issued after 6 April 2013) or the policyholder (if the policy was issued before 6 April 2013) was not resident in the UK for any part of the period since the policy was taken out. In my case, as I understand it, as the policies were issued before 6 April 2013, and the policyholder was never a resident in the UK, I shouldn't have to pay any tax. I would be glad if someone else could confirm this, or let me know if my understanding is flawed.
Posted Tue, 16 May 2023 12:17:49 GMT by Tax20
Hi My understanding with the above post is, in addition to it and those rules, that if the policy was issued before 17th November 1983. Then the 2013 above rules can't be applied (i.e. time apportioned reductions not valid) BUT if issued prior to this date, they don't come under the "foreign policy" definition, and therefore 20% tax can be treated as paid. as mine was issued in 1980 and so far, I can't find any other rules, which would cancel this out for whatever reason. I am assuming that it is correct. 

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Posted Fri, 19 May 2023 15:39:04 GMT by HMRC Admin 10
IPTM3730 advises that the gain is reduced by an appropriate fraction equal to A/B, where A is the number of days the polilcy holder was not resident in the UK in the policy period and B, the total mumber of days in the policy.  
The reduction does not apply to a policy held by
- Non-UK resident trustees unless it was held by them on 19 March 1985
- A foreign institution unless it was held by it on 16 March 1998.
Posted Tue, 23 May 2023 09:46:06 GMT by HMRC Admin 32
Hi Tax20,

Please refer to additional guidance at:

IPTM3730 - Foreign policies: reduction for non-UK policyholder

The time apportionement is based on the residence of the policy holder.

Thank you.

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