Revenue Note for Guidance
This Chapter, containing sections 730B to 730GB, sets out the taxation treatment of policyholders of life assurance companies in respect of “new basis business” – see section 730A(1). It provides what is/is not a chargeable event, provides a method for calculating and taxing any gain which may arise on said chargeable event and provides for the return and collection of any tax due. It also provides for the taxation of personal portfolio life policies.
This section outlines a new regime for the taxation of policyholders of life assurance companies in respect of “new basis business” as defined in section 730A(1). This new regime allows policyholders’ funds to grow tax-free until such time as a policyholder realises his/her investment and, if applicable, 8 years after the policy commenced. At that stage an “exit tax” is imposed.
(1) For the purposes of this Chapter, “return” means a return made under section 730G.
(2) This exit tax regime applies to life policies, defined to mean life assurance policies or sinking fund or capital redemption business policies, where the life policy is “new basis business” of the assurance company which commenced the life policy.
(3) The new regime does not apply to life policies relating to pension business, general annuity business or permanent health business of an assurance company.
(4) Whereas the obligation to account for and remit exit tax normally falls on the assurance company concerned, where the Courts Service invests funds in a life company, that obligation falls on the Courts Service. In addition, the Courts Service is required to make an annual return to the Revenue Commissioners setting out—
Relevant Date: Finance Act 2021