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UK Endownment policy - tax

  • 03-05-2017 4:41pm
    #1
    IsaBrown
    Registered Users, Registered Users 2 Posts: 78 ✭✭


    I have an endowment policy with friends life in the UK, taken out in 1991. It has matured (25 years) and I can plan to cash it in. The gains on the investment over 25 years are approx €9,000. I'm tax resident in Ireland since 2000. The policy is a "qualifying"policy under UK rules and therefore tax free in the UK. What are the rules in Ireland? Do I have to pay CGT on the €9k or is it exempt as a UK "qualifying" policy taken out 25 years ago?


Comments

  • #2
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,998 ✭✭✭✭Peregrinus


    Taxable in Ireland, I'm afraid. An Irish resident is taxable on worldwide gains and income. The UK legislation under which the policy is "qualified" can exempt policyholders from UK tax, but it can't exempt them from tax in Ireland (or any other country). And the Ireland/UK Double Taxation Agreement doesn't help you here.


  • #3
    exaisle
    Registered Users, Registered Users 2 Posts: 2,675 ✭✭✭exaisle


    Peregrinus wrote: »
    Taxable in Ireland, I'm afraid. An Irish resident is taxable on worldwide gains and income. The UK legislation under which the policy is "qualified" can exempt policyholders from UK tax, but it can't exempt them from tax in Ireland (or any other country). And the Ireland/UK Double Taxation Agreement doesn't help you here.

    Is inflation relief available in respect of premiums paid from 1991 to 2003?

    If that's the case,then I'd guess that between inflation relief and the personal exemption of €1270 then the actual liability might be minimal....


  • #4
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,998 ✭✭✭✭Peregrinus


    exaisle wrote: »
    Is inflation relief available in respect of premiums paid from 1991 to 2003?

    If that's the case,then I'd guess that between inflation relief and the personal exemption of €1270 then the actual liability might be minimal....
    No. With gains on a life insurance policy (inc. an endowment policy) you don't get indexation relief, and you don't get the small gains exemption.

    Oh, wait. Rereading the OP, I see this is a pre-1993 policy; it was taken out in 1991. In that case, only the part of the gain acccruing after March 2001 is chargeable. So if the policy was taken out in 1991, 26 years ago, and the first 10 years' gain is exempt, the chargeable gain is approximately 9k x (16/26).


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