IPTM3210 | Person liable to charge: chargeable event certificates

UK Insurers

UK insurers are required to issue chargeable event certificates to policyholders reporting chargeable events. They are also required to show on the certificate the full gain on the chargeable event except:

• on whole assignments, where instead various details of the event and policy must be provided, or

• where commission on the policy has been rebated or reinvested as premium and this affects the computation of the gain, as explained in IPTM3527. Then the gain will be reported without taking into account the rebated or reinvested commission, because the insurer will not have all the information to enable it to calculate the full gain.

UK insurers are also required to issue certificates to HMRC, reporting the same information as to policyholders, on all whole assignments and on all other chargeable events where the gain exceeds half the basic rate limit for the tax year in which the event occurred. IPTM7165 outlines what information needs to be provided.

UK insurers can report chargeable event gains to HMRC as a flat text file or on the chargeable event spreadsheet. See the following guidance for more information: https://www.gov.uk/guidance/reporting-of-chargeable-event-gains-life-insurance-policies

Alternatively, certificates for HMRC can be sent by email to [email protected] or by post to the following address:

HMRC – UK Chargeable Events
RIS COIR Production
Floor 7
1 Atlantic Square
Glasgow
G2 8HS

Overseas Insurers

Where a policy or contract is with an overseas insurer and was taken out on or after 6 April 2000, the insurer is subject to the same obligations to provide certificates to policyholders and HMRC as its UK counterparts.

Where the policy or contract was taken out before 6 April 2000 and the overseas insurer has been released from the requirement to appoint a tax representative, the insurer is only required to report the nature of an event bringing the policy to an end, and the amount of proceeds paid on that event. This must be reported to policyholders irrespective of the size of the proceeds, but only to HMRC if the proceeds exceed twice the basic rate limit for the year in which the event occurred. See IPTM9180 and IPTM9190 for further details of reporting requirements.

Overseas insurers can report chargeable event gains to HMRC using the chargeable event spreadsheet. See the following guidance for more information: https://www.gov.uk/guidance/reporting-of-chargeable-event-gains-life-insurance-policies

Alternatively, certificates for HMRC can be sent by email to [email protected] or by post to the following address:

HMRC – Offshore Chargeable Events
RIS Offshore
SO842
Benton Park View
Newcastle Upon Tyne
NE98 1ZZ

Policyholders

The person liable to tax on the gain – see IPTM3200 – should report the gain. The action to take will depend on the individual’s circumstances as follows:

1. If the individual is already within Self Assessment, the gain should be reported in their Self Assessment tax return.

2. If the individual is not within Self Assessment, but the gain (together with their other savings and investment income) exceeds £10,000, they will need to register for Self Assessment and report the gain in their Self Assessment tax return. See the following guidance on how to register: https://www.gov.uk/self-assessment-tax-returns/sending-return

Gains arising from UK policies should be reported in the "Other UK income" section of the tax return, under "Gains from life insurance policies, capital redemption policies and life annuity contracts". If you complete a paper tax return, use the "Additional information" supplementary pages (SA101).

Gains arising from foreign policies should be reported in the Foreign section of the tax return, under "Other overseas income and gains". If you complete a paper tax return, use the Foreign supplementary pages (SA106).

3. If the individual is not within Self Assessment and the gain (together with their other savings and investment income) does not exceed £10,000, they should report it by either:

• contacting Self Assessment: general enquiries

• sending a copy of the chargeable event certificate and a note of their National Insurance number to Self Assessment, HM Revenue and Customs, BX9 1AS.