New 528A Reduction in amount charged on basis of non-UK residence of deceased person
17.New section 528A(1) applies to reduce the amount of a personal representative’s tax liability under section 466 ITTOIA on a chargeable event gain where the deceased has not been resident in the UK during the material interest period.
18.New section 528A(2) applies to reduce trustees’ liability to tax on a chargeable event gain under section 467 ITTOIA in respect of a deceased settlor where the deceased was not resident in the UK during the material interest period.
19.New section 528A(3) explains that the liability to tax of personal representatives or trustees on a gain on a life insurance policy is to be reduced by the appropriate fraction.
20.New section 528A(4) provides details of the fraction for new section 528A.
21.New section 528A(5) provides that references to ‘gain’ in new subsection (3) is to the gain after it has been reduced in accordance with section 463C(8) ITTOIA.
22.New section 528A(6) defines ‘material interest period’ for the purposes of new section 528A.
23.New section 528A(7) applies subsections (8) and (9) if there was an assignment between spouses or civil partners prior to the deceased’s death and the deceased was the assignee.
24.New section 528A(8) explains that the material interest period includes so much of the period prior to the assignment that the assignor met conditions A, B or C in section 465.
25.New section 528A(9) explains that when a period falls under subsection (8) any reference to an individual under new subsection (1)(b) or (2)(b) is to be deemed to also include a reference to the assignor.
26.New section 528A(10) provides that references to rights in section 465(2) to (4) ITTOIA include references to a share of those rights for the purposes of new section 528A subsections (6) and (8).
27.New section 528A(11) defines the term ‘policy period’ for the purposes of new section 528A.
28.New section 528A(12) provides that where a new policy is issued for another policy (policy ‘A’) the ‘policy period’ in new sub-section (11) includes the period for which (A) was in existence. If A itself were a new policy issued for another policy (policy ‘B’) the ‘policy period’ in new sub-section (11) will include the period for which both A and B are in existence.
29.New section 528A(13) explains that ‘new policy’ in subsection (12) takes its meaning from paragraph 17 of Schedule 15 to ICTA 1988.
30.Paragraph 4 of Schedule 8 repeals section 529 ITTOIA.
31.Paragraph 5(1) of Schedule 8 amends section 536 ITTOIA (top slicing relief).
32.Paragraph 5(2) of Schedule 8 amends section 536(6) to provide that the top slicing relief calculation in section 536(2) does not apply where the gain on a life insurance policy is reduced under new section 528.
33.Paragraph 5(3) of Schedule 8 amends section 536(7).
34.New section 536(7) provides that in computing top slicing relief the number of complete years for which the policy has run before the chargeable event gain arises will be reduced by the number of complete years in the material interest period during which the individual was non-UK resident.
35.Paragraph 6 of Schedule 8 inserts a new sub-paragraph (14) into section 552 of ICTA (information: duty of insurers).
36.Paragraph 7(1) and (2) of Schedule 8 sets out the effective dates for the changes made by Schedule 8.
37.Paragraph 7(3) of Schedule 8 defines ‘variation’ and ‘increase in the benefits secured’ for the purposes of paragraph 7 (2)(a).
38.Paragraph 7(4) of Schedule 8 explains the date on which the insurance or contract is made when a policy falls under section 473A ITTOIA for the purposes of paragraph 7(1) and (2).
