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Developments in the taxation of life assurance policies
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.
Also published in Thomson Reuters Taxnet Pro, 26 February 2014