Taxes Consolidation Act 1997 section 593

Life assurance and deferred annuities

Section 593 provides an exemption from Capital Gains Tax for gains arising on the disposal of life assurance policies and deferred annuity contracts, subject to certain conditions.

• Gains on the disposal of a life assurance policy or deferred annuity contract are exempt from CGT where the person disposing of the policy is the original beneficial owner
• The exemption is lost where the person making the disposal acquired the rights for consideration in money or money's worth (i.e. by purchase rather than by gift)
• A disposal is treated as occurring when the sum assured is paid, when the first annuity instalment is paid, or when the rights under the policy or contract are surrendered
• A transfer of investments or other assets to the policyholder under the terms of a policy is treated as payment of the sum assured