718 Foreign life assurance funds

Summary

This section sets out specific provisions which apply to foreign life assurance funds which are funds representing the amount of the liability of an assurance company in respect of its life business with policyholders and annuitants residing outside the State.

Details

(1) “foreign life assurance fund”, where the fund is kept separately from other life assurance funds, means any fund representing the amount of the liability of an assurance company in respect of its life business with policyholders and annuitants resident outside the State whose proposals were made to, or whose annuity contracts were granted by, the company at or through a branch or agency outside the State. Where the fund is not kept separately, it means such part of the life assurance fund as represents the company’s liability under polices and annuity contracts made or granted to non-residents as estimated in the same manner as it is estimated for the purposes of the periodical returns of the company.

(2) Income arising to a foreign life assurance fund from securities and possessions in any place outside the State is taxed under Case III of Schedule D on the amount remitted to the State.

(3) & (4) Where certain stocks and securities form part of the investments of a foreign life assurance fund, the income from those stocks and securities is not liable to tax provided that the income is applied for the purposes of the fund or reinvested to form part of the fund. Income from a foreign life assurance fund remitted to the State and invested in such stocks or securities is also exempt from tax. The stocks and securities concerned are —

• securities issued by the Minister for Finance with exemption from tax under section 43, and
• stocks and other securities exempt from tax as provided by section 49.

(5) Where this section applies to relieve from corporation tax income from investments of a foreign life assurance fund, a corresponding reduction is made in respect of management expenses. A corresponding reduction is also made in the amount on which the company is chargeable to corporation tax by virtue of section 715 in respect of general annuity business, or pension business in so far as the investment income relieved is referable to those classes of business.

(6) Where the section applies in relation to income arising from investments of any part of an assurance company’s life assurance fund, it likewise applies to chargeable gains assuring from the disposal of those investments. However, any loss arising from the disposal of the investments are not allowable losses.

Relevant Date: Finance Act 2021