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IPTM9160 | Overseas insurers: release from requirement to appoint a tax representative: post-5 April 2000 policies and contracts: certificates for HMRC

From HM Revenue & Customs · Insurance Policyholder Taxation Manual

When certificates must be provided to HMRC

Where the policyholder is an individual or trustee, an overseas insurer must provide a chargeable event certificate to HMRC if the gain on that event, when aggregated with any ‘connected gains’ – see below – in the same tax year, exceeds half the ‘basic rate limit’.

The basic rate limit for a tax year is defined in ITA07/S10(2). It is the amount of taxable income up to which a taxpayer is chargeable at the UK basic rate (not the rate set by a devolved government). It is set annually in the Finance Act.

Connected gains

IPTM7150 explains what is meant by connected gains. Connected gains will arise on cluster policies - see IPTM7230 - but the scope of the definition goes much wider than just cluster policies.

Overseas insurers should keep suitable records of chargeable events to ensure that connected gains are correctly identified and aggregated.

A gain on a whole assignment may be a connected gain but if, exceptionally, an insurer is unable to calculate the gain on assignment because it cannot ascertain the value - see IPTM9170 - then that gain cannot be included in connected gains.

Information to be provided on certificates to HMRC and time limits

A chargeable event certificate for HMRC must show

  • the name and address of each of the policyholders - see IPTM7175 and IPTM7180 for further guidance where there is a power of attorney, policies held on trust or a difficulty in establishing a current private address for a policyholder

  • the policy reference number, and

  • the same information about the chargeable event as on the certificate for the policyholder - see IPTM9150.

In contrast to the position for UK insurers, there is no prescribed format for certificates from overseas insurers but it would be helpful if they are distinguished accordingly, for instance with the heading ‘Chargeable Event Certificate – Overseas Insurer’.

Certificates should be sent to HMRC at the contact address in IPTM3210 within three months of the end of the tax year in which the certificate for the policyholder was sent.