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Posted Sun, 02 Jul 2023 16:36:25 GMT by
Hello, I have moved from Hong Kong to the UK since 2021, and am a UK resident now. I bought a life insurance policy in Hong Kong in 2009, and have been paying monthly premiums into it. I am now deciding to surrender the policy. If so I will then get back some of the funds that I have paid into the policy, after reducing some penalty charges. Since I will not get any profit / gains from it (actually suffer a loss) but only to get back some of my own money, does it mean I do not need to declare this money in my self assessment? Thank you.
Posted Fri, 07 Jul 2023 08:54:24 GMT by HMRC Admin 20
Hi Hiu Young,

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.
Further guidance is at - HS321 Gains on foreign life insurance policies (2023)

Thank you.
Posted Fri, 07 Jul 2023 11:05:16 GMT by
Thank you for the information. According to my foreign life insurance policy illustration, the total premiums I paid in the past 14 years is around £15000. Since the policy is not mature, if I surrender now I can get back a guaranteed value of around £10800, while the accumulated dividends and interest amount is £0. It is because I surrender in a year before I can get any dividends and interest. May I confirm in this case does it mean I do not need to declare the £10800 I get back? Thank you.
Posted Thu, 13 Jul 2023 12:21:26 GMT by HMRC Admin 20
Hi Hiu Young,

A chargeable event may arise from the the full or partial surrender of a life insurance policy.  
Your policy provider will be best placed to confirm if there is a gain.  
If there is, they will send you a chargeable event certificate.  
If the gain is more than £10000.00, you will need to reports this on a self assessment tax return, supplementary page SA101.  
HS320 Gains on UK life insurance policies (2023)

Thank you.

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