The new rules are contained in an extra-statutory concession, which is in three parts.
According to an Inland Revenue statement:
Part 1 extends the terms of an existing Statement of Practice. An individual or a company that is not resident in the UK in the year of assessment or company accounting period when they make a `gain' will not have to pay tax on it. This means less information will have to be provided.
Part 2 is new. A UK insurer will not have to send information to the Inland Revenue about `gains' made by non-resident policy holders if:
the insurer has given information to the policy holder's or the branch's domestic tax authorities; or
the policy is part of the business of a non-UK branch of the insurer unless most of the branch's business is with UK-residents.
Relaxation of the information requirements will reduce the compliance obligations of insurers who operate through foreign branches whose business is not primarily with UK residents.
Part 3 of the concession is also new. It deals with individuals who come to the UK with personal portfolio bonds (PPBs) who want to take advantage of a transitional relief for PPBs that were in existence when this anti-avoidance legislation was announced on Budget day 1998. An individual who comes to the UK to take up permanent residence or to stay for at least 2 years who needs to change the terms of a PPB to take advantage of the transitional relief will have at least 12 months to do so.
The concession has been the subject of detailed consultation with the Association of British Insurers and is welcomed by it. The Government is grateful to the association. The text of the new concession is attached as an annex to an Inland Revenue press release.
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