Commentary

E1.453 Life insurance gains—part surrenders and assignments

Personal and employment tax

E1.453 Life insurance gains—part surrenders and assignments

E1.453 Life insurance gains—part surrenders and assignments

When a part or a share in the rights under a policy or contract is surrendered or assigned for money or money's worth, a calculation has to be made at the end of the insurance year in which that event takes place to determine whether a gain has arisen1. For cases in which the First-Tier Tribunal upheld assessments issued under this provision, see Shanthiratnam2 and Cleghorn3. Note that these rules are capable of producing high rates of tax and very careful consideration needs to be taken about the tax effects of part surrenders

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