IPTM9020 | Overseas insurers: scope of reporting rules: insurers affected

An overseas insurer will come within the scope of the chargeable event reporting rules if it, together with any connected insurers, conducts a certain minimum level of life business with UK residents.

Where gross premiums on relevant insurances are at least £1m

If the total amount or value of gross premiums paid to date by UK residents on all relevant insurances from the insurer and any connected overseas insurers is at least £1 million, the insurer will be within the reporting regime. The meaning of ‘relevant insurances’ and ‘gross premiums’ is given in IPTM9030.The meaning of ‘connected insurer’ is given below.

If the total was previously below £1 million but subsequently increases to at least £1 million then the insurer will fall within the reporting rules with effect from three months from the date on which the £1 million threshold is crossed.

Most overseas insurers conducting business with UK residents will not need to make this calculation since it will be clear that the amount of business exceeds £1 million. But an overseas insurer whose level of UK business is just below the limit should keep the amount under review.

Where gross premiums on relevant insurances are less than £1m

If the total of gross premiums from UK residents is less than £1 million, and has been since 6 April 1999 when the reporting regime for overseas insurers was introduced, then there are no reporting obligations on the insurer.

Once the insurer is within the scope of the reporting rules because the total amount of gross premiums has been at least £1 million on some date since 6 April 1999, it must remain within the reporting rules unless total business with UK residents ceases or becomes negligible. An insurer would not automatically drop out of the reporting regime simply because the total of gross premiums fell below £1 million.

Where business with UK residents ceases or the total amount of gross premiums paid declines to a negligible amount, less than £100,000, say, the insurer may apply to HMRC for release from the requirement to have a tax representative, which effectively takes it out of the reporting regime. This might happen where an overseas insurer has sold or transferred most or all of its UK business to another insurer - see IPTM9200.

Where premiums under relevant insurances fall to nil or a negligible amount, IPTM9200 describes the procedure for applying to HMRC for a release from the requirement to have a tax representative. A release in these circumstances will only be granted on the condition that the insurer notifies HMRC if in future the level of business again crosses the £1 million threshold.

Connected insurers

An overseas insurer is connected with another overseas insurer if they are connected within the meaning given in CTA10/S1122 – see CG14580 onwards, which refers to the similar connected persons definition at TCGA92/S286. Insurers will be connected, for instance, if they are under common control.

If the total of premiums paid on relevant insurances is at least £1 million, the reporting rules will apply to any connected overseas insurer conducting business in the UK, even if the total of premiums paid on relevant insurances from that insurer is less than £1 million.