Income Tax (Trading and Other Income) Act 2005 section 476

Special rules: foreign policies

Section 476 sets out the special rules that apply when calculating taxable gains on foreign life insurance policies and foreign capital redemption policies, and defines the key terms used throughout the chapter.

• Foreign policies and contracts are taxed under the same chapter as UK policies, but with important differences because the underlying investment profits have usually not been subject to UK tax
• A foreign policy of life insurance is one issued by a non-UK resident company, or one forming part of an insurer's overseas life assurance business
• A foreign capital redemption policy is similarly one issued by a non-UK resident company, or one forming part of an insurer's overseas life assurance business
• Foreign policies are generally excluded from the deemed income tax credit under section 530, although certain reliefs under sections 531 to 534 may apply