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Posted Tue, 03 Oct 2023 09:04:45 GMT by mkcchan
Hi HMRC, I surrendered an Investment Linked Insurance policy in foreign country. There was a loss in surrendering the policy. Should it consider as income loss or capital loss? I paid the monthly premium in foreign currency for over 15 years. Which exchange rate should I use to determine the purchase price in GBP? May I use the exchange rate at the time I surrendered the policy to determine the purchase price and selling price in GBP? Is it necessary to report this case in self assessment in case this is an income loss? Pls comment. Thanks.
Posted Fri, 06 Oct 2023 14:30:10 GMT by HMRC Admin 25
Hi mkcchan,
The result of the calculation when a chargeable event arises may not be a positive amount.
There’s no relief for a loss and you should not make any entries on your tax return.
However, if the result of a full surrender, death or maturity calculation is negative and you made gains on the policy in earlier years, the section that follows about ‘deficiency relief’ may be relevant.
A loss on one policy cannot be set off against a gain on another policy.
Thank you. 

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