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Developments in the taxation of life assurance policies

Ireland
26 Feb 2014

The Finance (No. 2) Act 2013 changed the tax rates applicable to Irish resident investors in life assurance policies. Taxand Ireland clarifies the new tax rates and instances when they apply. 

The occurrence of any of the following events triggers a charge to tax (though certain exceptions still apply):

  • The maturity of the life policy 
  • The surrender in whole or in part of the rights conferred by the life policy 
  • The assignment in whole or in part of the life policy 
  • The ending of an 8 year period beginning with the inception of the life policy and each subsequent 8 year period 

Since 1 January 2013, the rate of taxation on any gains made by Irish resident individuals who invest in life assurance policies has increased to 41%. The rate of tax applicable to Irish resident individuals investing in personal portfolio life policies (where the policyholder can influence the choice of the underlying assets) has increased to 60%.

The insurer is liable to account for these taxes by withholding the relevant tax from the gain made by policyholder. 

Discover more: Developments in the taxation of life assurance policies


Your Taxand contacts for further queries are:
Martin Phelan
T. +353 1 639 5139
E. martin.phelan@williamfry.ie

Lisa Dunne
E. lisa.dunne@williamfry.ie

Also published in Thomson Reuters Taxnet Pro, 26 February 2014

Taxand's Take

It is important to note that where the insurer is liable to account for Irish tax on gains made by Irish resident companies, the rate of tax remains at 25% provided a declaration is in place by the Irish company. 

Taxand's Take Author

Martin Phelan
Taxand Board member
Ireland

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