Share this content

Is a gain on a French life ins policy taxable?

Would I need to include a French gain on her tax return?

Didn't find your answer?

A client received a payout from a life insurance policy on her mothers death in France.

My client has been resident in the UK since the mid 80's.

She has paid tax at 20% on the gain over E152,500 to the French authorities.

Do I need to include it on her tax return?

Many thanks 

Replies (10)

Please login or register to join the discussion.

avatar
By David Ex
19th Jan 2022 22:54

chicka wrote:

A client received a payout from a life insurance policy on her mothers death in France.

Not sure it affects the (UK) tax but do you mean the client maintained a policy on her mother’s life? Or was the policy one taken out by her mother which paid into her mother’s estate - which was then distributed to your client?

Thanks (0)
Replying to David Ex:
avatar
By Hugo Fair
20th Jan 2022 01:21

Or, more commonly, a policy taken out by the mother but with client as named beneficiary (in which case it doesn't go anywhere near the mother's estate)?

Thanks (1)
avatar
By Tax Dragon
20th Jan 2022 06:33

UK perspective: read HS321.

20% French tax sounds like the equivalent of IHT which may indicate it's passed through mother's estate.

But I don't like 'working backwards' like that to get at the facts - I'd rather just be told the facts.

Thanks (0)
Caroline
By accountantccole
20th Jan 2022 08:36

I haven't had to look at one of these in depth before so can't add much detail but it looks like there are two possible ways of taxing an assurance vie which is probably the way the product that was used (to check). It can either be under inheritence rules or a flat 20%
https://www.impots.gouv.fr/portail/international-particulier/questions/c...

Thanks (0)
Scooby
By gainsborough
20th Jan 2022 08:55

Does sound more like IHT according to this: https://www.french-property.com/guides/france/finance-taxation/inheritan...

Similar question asked on HMRC's forum last year: https://community.hmrc.gov.uk/customerforums/pt/1fc06ea1-bc6b-eb11-8fed-....

Is there a foreign chargeable event certificate in your client's name?

Thanks (0)
avatar
By Gerry Brown
20th Jan 2022 09:59

Who owned the policy? Who paid the premiums? If your client simply received the proceeds of a policy owned by her mother then in my view she has no UK tax liability on that sum.

Thanks (1)
Replying to Gerry Brown:
avatar
By Tax Dragon
20th Jan 2022 10:17

I love that personal 'views' with no basis in tax law get thanked in this forum.

Yes, interpretation does come into taxation, and yes opinions may differ on the interpretation of some tax law. But you have to start with the law. Or are you basing your 'view' on something more, just not telling us what?

Thanks (1)
Replying to Tax Dragon:
avatar
By jonharris999
20th Jan 2022 10:25

Indeed, and I think [is that allowed, Drags?] that if client was beneficiary after principal's death, then a Chargeable Event Cert as referred to above will help, and/or a statement showing the surrender value of then policy before the decease - the difference between that and the eventual surrender value will be taxable.

Thanks (1)
Replying to jonharris999:
avatar
By Tax Dragon
20th Jan 2022 12:05

Hey I'm not the tax police. I'm not even a mod. People can say whatever they want and, so long as they stay within the rules of the site (and eg the MOP OP doesn't ask for it to be taken down, etc), their comment will stand. There's no testing for technical correctness or similar.

Re Gerry's comment, the confusing (confused?) words are "If your client simply received the proceeds of a policy owned by her mother". If you own something, you get the proceeds. If the client received the proceeds (and surely by "simply", Gerry meant "directly"), then the client owned the [beneficial rights under the] policy.

Thanks (0)
avatar
By chicka
20th Jan 2022 15:48

Thank you for all who have taken the time to comment - I will obtain a a copy of the chargeable event certificate and read through all of the links given on here

Thanks (0)
Share this content