Income Tax (Trading and Other Income) Act 2005 section 532

Relief for policies and contracts with European Economic Area insurers

Section 532 allows the income tax credit normally available under section 530 to apply to gains on foreign life insurance policies, foreign capital redemption policies, and life annuity contracts issued by non-UK resident insurers based in the European Economic Area, provided three conditions are met throughout the policy period and a claim is made.

• A claim must be made that three conditions (A to C) have been satisfied throughout the policy period, enabling the section 530 tax credit to apply to gains from foreign life insurance policies, foreign capital redemption policies, and life annuity contracts
• Condition A requires that the insurer has not been UK resident, and Condition B requires that a comparable EEA tax charge has applied to the insurer throughout the policy period
• Condition C requires that no excluded reinsurance contract — one covering the insurer's obligations other than pure life, sickness, or accident risk — has been made in relation to the policy or contract
• The policy period runs from inception of the policy or contract to the date the gain arises, but excludes any periods when the underlying investment profits were already subject to UK tax