Income Tax (Trading and Other Income) Act 2005 section 465

Person liable: individuals

Section 465 determines when a UK resident individual is liable to income tax on gains arising from life insurance policies, capital redemption contracts and life annuity contracts, based on three possible ways of holding or owning the rights under such policies or contracts.

• A UK resident individual is taxable on gains from life insurance policies and similar contracts if they beneficially own the rights, have placed them in a non-charitable trust they created, or use them as security for a debt
• Where the tax year is a split year for the individual, gains arising in the overseas part of that year are not taxable (subject to the temporary non-residence rules in section 465B)
• Trusts arising under certain married women's property legislation are treated as trusts created by the individual for these purposes, meaning the individual remains the person liable to tax on gains
• Any amount charged to tax under this chapter is treated as part of the individual's total income, and individuals taxed on gains held in non-charitable trusts may recover amounts from the trustees under section 538