The profit is deemed to arise on the happening of a chargeable event, basically when value is received, or deemed to be received, from the policy. As the profit will have arisen over a period of years, a form of ‘top-slicing’ relief is available to mitigate the effects of all the profit being taxed in one year.

The chargeable event regime applies to:

policies issued in respect of life insurance contracts;

contracts for life annuities; and

capital redemption policies,

where they were effected on or after 20 March 1968.

A chargeable event generally arises on:

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