UK resident policyholders sometimes invest in overseas insurance bonds to defer tax liabilities of the insurance policy. The use of these policies is increasingly scrutinised by HMRC, writes Andrew Park (BDO).
Our experience of HMRC’s interest and challenges to overseas insurance bonds – ‘foreign policies of life insurance’ for UK tax purposes as defined in ITTOIA 2005 s 476 – relate to two distinct areas:
whether policies fall foul of anti-avoidance legislation and are hence ‘personal portfolio bonds’ (PPBs); and
the legitimacy or otherwise of using entities held under PPBs for commercial purposes.
PPBs
Overseas insurance bonds which are not PPBs are subject to the chargeable event regime which enables individual investors to postpone tax on underlying economic gains until the policy comes to an end. However the PPB rules provide a stricter regime where the...
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UK resident policyholders sometimes invest in overseas insurance bonds to defer tax liabilities of the insurance policy. The use of these policies is increasingly scrutinised by HMRC, writes Andrew Park (BDO).
Our experience of HMRC’s interest and challenges to overseas insurance bonds – ‘foreign policies of life insurance’ for UK tax purposes as defined in ITTOIA 2005 s 476 – relate to two distinct areas:
whether policies fall foul of anti-avoidance legislation and are hence ‘personal portfolio bonds’ (PPBs); and
the legitimacy or otherwise of using entities held under PPBs for commercial purposes.
PPBs
Overseas insurance bonds which are not PPBs are subject to the chargeable event regime which enables individual investors to postpone tax on underlying economic gains until the policy comes to an end. However the PPB rules provide a stricter regime where the...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
