Special notice for UK resident policy owners

Section 87 of the UK Finance Act 1998 introduced a requirement for an overseas insurer, such as Nordben Life and Pension Insurance Co. Limited, to have a Tax Representative in the UK. Nordben Life and Pension Insurance Co. Limited has been granted an exemption by the UK Inland Revenue (the Revenue) from appointing a Tax Representative in the UK. However, we are required to supply the Revenue with information, in clearly defined circumstances, which relates to policies that to the best of our knowledge are owned by a UK resident. The regulations came into effect on 6 April 1999, and introduced reporting requirements from 6 July 1999.

The requirements for policies taken out on or after 6 April 2000 are broadly as follows:

For policies written on or after 6 April 2000, Nordben Life and Pension Insurance Co. Limited is required to supply sufficient information to those policy owners (Grantees) that it knows to be UK resident, to allow them to complete the UK self-assessment form in respect of gains on offshore policies. Copies of this information will be provided to the Revenue where the gain is greater than half the basic rate tax threshold. For the tax year 2010/2011 this means gains currently greater than

GBP 18,700. Chargeable events trigger the need to report. These are broadly:

• full encashments
• partial encashments
• regular withdrawals
• death
• assignments

This requirement only applies if the policy owner (Grantee) is UK resident at the time of the chargeable event.

For the purpose of the financial limits mentioned above, chargeable events on policies with the same insurer occurring in the same year of assessment are added together. These limits are linked to the basic rate tax threshold and thus provide an element of index-linking each year.

The requirements for policies taken out before 6 April 2000 are broadly as follows:

For policies written before 6 April 2000, Nordben Life and Pension Insurance Co. Limited is required to inform the Revenue if a policy has been terminated and the amount paid out on termination is greater than twice the basic rate tax threshold. For the tax year 2010/2011, this would cover payments currently in excess of GBP74,800 Only transactions which result in termination of the policy will be reported, for example, full encashment or death.

The reporting requirement only applies if the policyholder (Grantee) is UK resident at that time. The reporting requirement generally does not apply to members of Group Pension Schemes or Plans.