Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 6

Certain life policies – taxation and returns

Overview

This Chapter, which contains sections 730H to 730K, provides rules for the taxation of certain foreign life policies. These are policies commenced by an assurance company established in an offshore state (an “offshore state” is defined in section 730H). However this does not include policies commenced by a branch or agency of the assurance company that is carrying on business within the State. Foreign life policies also include policies commenced by a branch or agency of a domestic assurance company that is carrying on business in an offshore state.

730H Interpretation and application

Summary

This section defines some terms and concepts used in the following sections of the Chapter.

Details

Definitions

(1) In this Chapter the following definitions apply —

“EEA Agreement” means the Agreement on the European Economic Area signed in Oporto on 2 May, 1992 and adjusted in Brussels on 17 March, 1993.

“EEA state” means a State other than Ireland which is a party to the EEA Agreement.

“foreign life policy” means a life assurance policy issued by a life assurance company, or its branch or agency, in an offshore state.

An “offshore state” means a State other than Ireland, which is —

  • a Member State of the European Communities,
  • an EEA State, or
  • a Member State of the Organisation for Economic Cooperation and Development (OECD) with which Ireland has a double taxation agreement.

“relevant event” means the ending of a “relevant period”, where a relevant period is an 8-year period beginning with the inception of the life policy and each subsequent 8-year period beginning when the previous one ends.

“relevant payment” means a regularly reoccurring payment from a foreign life policy to a person. It does not include a payment made in consideration of the whole or part disposal of the foreign life policy.

(2) The capital gains tax provisions governing when there is a disposal of an asset also apply to determining when there is a disposal of a foreign life policy.

An income from, or details of a disposal of, a life policy is treated as having been correctly included in a return where the income or details of the disposal are included in a return of income made on or before the specified return date for the chargeable period in which the income arises, or in which the disposal is made.

Relevant Date: Finance Act 2019