Offshore life insurance policies
The measure
Anti-avoidance measures will prevent offshore life insurance policies being used to create income tax losses that can be offset against other taxable income. Such tax deductions will be disallowed from 2009/10 onwards even if the loss relates to a previous year. The new rules apply to all losses on offshore life insurance policies, not just those where losses have been created artificially.
This does not affect the ability of UK resident individual policyholders to obtain relief against their higher rate tax liabilities for deficiencies on life insurance policies where there have been earlier chargeable events.
Who will be affected?
Taxpayers with losses on offshore life insurance policies.
When?
The measures will apply from 6 April 2009 (and may also apply to some transactions that took place on or after 1 April 2009).
These measures will make clear that income tax loss relief does not apply to offshore life assurance policies and will block schemes that previously relied on this loophole.
