Taxes Consolidation Act 1997 section 718

Foreign life assurance funds

Section 718 sets out the corporation tax treatment of income and gains arising from foreign life assurance funds maintained by assurance companies in respect of non-resident policyholders.

• A foreign life assurance fund represents the liabilities of an assurance company to policyholders and annuitants residing outside the State whose contracts were made through a foreign branch or agency.
• Foreign investment income of the fund is taxed under Case III of Schedule D on the amount remitted to the State, with no deductions allowed.
• Income from qualifying Irish government or semi-State securities forming part of the fund is exempt from corporation tax if applied for the purposes of the fund or reinvested in it, and remitted foreign income invested in such securities is likewise exempt.
• Where income is relieved from corporation tax under this section, corresponding reductions are made to management expenses relief and to amounts chargeable under section 715 in respect of general annuity business or pension business, and chargeable gains are treated in the same way as income but capital losses are not allowable.