In Captain S Cleghorn v HMRC (TC01335 – 18 August) an individual (C) had invested £66 000 in an Isle of Man life insurance policy in March 2002.
During 2002/03 he withdrew £24 300 and he made further withdrawals in the next two years.
HMRC subsequently issued assessments under ITTOIA 2005 s 498.
The First-tier Tribunal upheld the assessments and dismissed C’s appeal.
Why it matters: ITTOIA 2005 s 498 provides for ‘periodic calculations’ where there is a partial surrender of a life insurance policy.
The Tribunal upheld an assessment issued in accordance with this provision.
Anyone contemplating such a part surrender should consider the tax consequences.
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")