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ITTOIA2005/S528

If the gain is made on/after 6 April 2013, then the gain is reduced using the following formula: A/B, where:

• A is the number of days that are foreign days in the material interest period. Foreign days are all the days in a tax year for which the individual is not UK resident and any days in a split year in which the individual is taxed as if not UK resident (the overseas part).
• B is the number of days in the material interest period.

Foreign Days

»Ê¹ÚÌåÓýapp meaning of foreign days for the purposes of the above calculation depends on whether the policy held falls under the rules applicable from 6 April 2013 or the rules applicable before this date for time apportioned reductions.

Under the pre 6 April 2013 rules, foreign days are:

• Days on which the policy holder is not UK resident, and
• Days falling within the overseas part of any tax year that is a split year in respect of the policy holder, provided the policy holder is an individual.

Under the rules applicable from 6 April 2013, foreign days are:

• Days falling within any tax year for which the individual liable to tax on the gain is not UK resident, and
• Days falling within the overseas part of any tax year that is a split year in respect of the individual liable to UK tax on the gain.

Material Interest Period

»Ê¹ÚÌåÓýapp material interest period is the part of the policy period during which the individual meets one of the following conditions:

• »Ê¹ÚÌåÓýapp individual beneficially owns the rights under the policy or contract.
• »Ê¹ÚÌåÓýapp rights are held on non-charitable trusts which the individual created.
• »Ê¹ÚÌåÓýapp rights are held as security for the individual’s debt.

»Ê¹ÚÌåÓýapp policy period is the period for which the policy has run prior to the chargeable event.