Australia

In general, a resident is defined as a person who meets either one of

the following conditions:
He or she is domiciled in Australia, unless the tax authority is
satisfied that the persons permanent place of abode is outside
Australia.
He or she is actually present in Australia continuously or
intermittently for more than half of the tax year, unless the tax
Authority is satisfied that the persons usual place of abode is
outside Australia and that the person does not intend to reside In
Australia. The residence tests can be met relatively easily.
A non-resident is a person who does not satisfy any of the above
Tests.

A temporary resident refers to an individual who satisfies the following

conditions:

The individual must be working in Australia under a temporary

Resident visa (for example, subclass 400 or 457, or a visitor Visa;
The individual must not be a resident of Australia for social Security
purposes (this covers Australian citizens, permanent Residents,
special visa categories such as refugees.
The individuals spouse (legal or de facto) must not be a resident of
Australia for social security purposes.

Capital Gains Tax

Residents (but not temporary residents) are taxable on their worldwide income,
including gains realized on the sale of capital assets. Capital assets include real
property and personal property, regardless of whether they are used in a trade or
business, and shares acquired for personal investment.
For an asset held at least 12 months only 50% of the capital gain resulting from
the disposal is subject to tax.
Non-residents and temporary residents are taxable only on gains arising from
disposals of taxable Australian property.

Taxation of Overseas Life Policy

Lump sum benefits from protection policies will not be subject to income
tax.
Funds within a life policy should grow free of tax whilst within the life
policy.
Policy gains, known as bonuses should not be taxable under the Foreign
Source Income Deferral Act 2010 if withdrawn after the policy has been
inforce for at least 10 years.
Care regarding top ups
The position of foreign life policy taxation could change as this was
omitted from the Act above.

Canada
Canadian residents are subject to tax on their worldwide income, whereas non residents are subject to tax only on Canadian source income.
Tax is based on residence of 183 days or more although residence is not exactly
defined in Canada but generally will also be determined by:

The location of ones property and dependants

Location of social ties and economic interests

Capital Gains Tax

Fifty percent of the years capital gains are included in taxable income, to the
extent that the amount exceeds 50% of capital losses for the year. This includes
capital gains on real estate and personal property, regardless of whether used in
a trade or business, and on shares held for personal investment
An individual who ceases Canadian residency is generally subject to a departure
tax on leaving Canada.
Taxation of Overseas Life Policy
We understand that a policyholder will be subject to income tax on the
accumulating fund of the policy accrued on an annual basis regardless if the
policy benefits are taken or not. The accumulating fund is defined as the
surrender value of the policy.

China
Individuals are considered to have resided in China for one full year if they reside
in China for 365 days during one calendar year.
For employment income, non-China-domiciled individuals who have resided in
China for one full year but less than five years are subject to China individual
income tax (IIT) on income earned from services rendered in China only.
China-domiciled individuals are subject to tax on their worldwide income as are
non-China-domiciled individuals who have resided in China for more than five
consecutive full years.
Capital Gains Tax
Income derived from the sale or transfer of movable or immovable property in
China is taxed at a flat 20% rate.
Capital gains derived from transfers of shares listed on China stock exchanges in
the secondary market are temporarily exempt from China IIT.
Taxation of Overseas Life Policy
It is our understanding that a policy may be subject to investment income tax at
20% on the gains.

France
All persons, French or foreign nationality are considered residents for tax
purposes if their home, principal place of abode, professional activity or centre of
economic interest is located in France. As a resident, an individual is taxed on
worldwide income, subject to applicable treaty exemptions.
Capital Gains Tax
Capital gains realized by a taxable household on the sale of listed or unlisted
shares, bonds or related funds are taxed at the taxpayers marginal rate of
taxation and are also subject to CSG/CRDS and social tax at a combined rate of
15.5%.
Taxation of Overseas Life Policy
Non EU policies are taxed more harshly than EU policies and are generally
subject to the progressive tax regime which can mean income tax at 41% and
social tax at 15.5% also.

Germany
Individuals are subject to tax on their worldwide income if they meet either of
the following conditions:

They have a domicile in Germany for their personal use.

They have a customary place of abode in Germany and do not stay only
temporarily at this place or in this area. This means that if they are
present in Germany for an uninterrupted period of at least six months that
may fall in two calendar years, a customary place of abode is given in any
case.

Capital Gains Tax

Gains derived from the disposal of real estate held not more than 10 years are
included in taxable income and taxed at the ordinary rates, unless the property
was exclusively used by the taxpayer as a personal residence in the year of sale
and the two preceding years.
Gains derived from the sale of shares acquired after 31 December 2008 are
subject to the 25% withholding tax mentioned in Investment income, regardless
of the holding period.
Taxation of Overseas Life Policy

Annual taxation of dividends & interest subject to income tax

Internal fund switches also subject to income tax
Normal income tax applies on surrender to gains.

We have a German compliant Bond which can mitigate some of these issues.

India
Residency depends on number of days an individual is physically present in India
and an individual can be classed as Resident, Non Resident or Resident but Not
Ordinarily Resident.
Resident- if 182 days or more during tax year or during 4 years prior to the year
under review being present in India for a period(s) totalling 365 days or more and
during the year under review the individual was present for a period(s) totalling
60 days or more.
Non Resident-if none of the above applies then non- resident and only Indian
source income subject to tax.
Resident Not Ordinarily Resident (NOR) individual has been in India in
9/10 tax years preceding the tax year under review or
During the 7 tax years immediately prior to the year under review individual was
present for periods totalling 729 days or less.
It is possible to be NOR for up to 3 tax years, if for each of those tax years under
review the above tests are passed.
Capital Gains Tax
Capital gains derived from the transfer of short-term assets are taxed at normal
rates.
Long-term capital gains are gains on assets that have been held for more than
three years. Long-term capital gains are exempt from tax in certain cases,
subject to certain limits, if the gains are reinvested within a prescribed time
period, normally within three years after purchase.
Taxation of Overseas Life Policy

Life policies are generally treated as capital assets and therefore Capital
Gains tax should apply.
Gains on a policy should be subject to CGT at 20% on any profits arising if
money is withdrawn after 36 months.
If capital withdrawn in first 36 months then profit likely to be subject to
income tax.

Ireland
The tax year is the calendar year. For the 2015 tax year, an individual is
regarded as an Irish tax resident if he or she meets any of the following
conditions:

He or she spends 183 or more days in Ireland during the period from 1
January 2015 to 31 December 2015.

He or she spends an aggregate of 280 or more days in Ireland during the

two-tax-year period from 1 January 2014 to 31 December 2015, with more
than 30 days in Ireland in each tax year.

He or she elects to become tax resident for the tax year in which he or she
comes to Ireland with the intention to be resident in the following tax year,
and is tax resident under one of the tests listed above in the following tax
year.

Tax concessions may apply in the year in which an individual becomes, or ceases
to be, Irish tax resident.
An individual becomes ordinarily tax resident in Ireland after being tax resident
for three consecutive tax years. An individual who is ordinarily tax resident and
who ceases to be tax resident in Ireland is treated as continuing to be ordinarily
resident for three tax years after the tax year of departure.
Individuals who are tax resident in Ireland are normally subject to tax on
worldwide income, including employment income, regardless of whether the
employment is carried on in Ireland or abroad. However, exceptions can apply to
the following individuals:

Foreign-domiciled individuals

Individuals who commute to work outside Ireland and pay tax on the
income from the employment outside Ireland

Individuals domiciled outside Ireland are entitled to a remittance basis of

assessment in Ireland on investment income arising outside Ireland and on
income from employment duties performed outside Ireland, to the extent that
the employment income is paid outside Ireland under a foreign contract.
Domicile in Ireland is not defined in the tax law but is a legal concept based on
the location of an individuals permanent home. Irish law treats domicile as
acquired at birth (usually it is the domicile of the father) and retained until an
individual takes positive steps to change to another domicile.
Capital Gains Tax
Individuals resident in Ireland generally are subject to tax on worldwide capital
gains. Non-domiciled individuals are not taxed on gains arising outside Ireland
unless the proceeds are remitted to Ireland. Capital gains are taxed at a rate of
33% for disposals on or after 6 December 2012.
So for a non- Irish - domicile any monies not remitted to Ireland will not
be taxed. In terms of foreign life policies our understanding is:
For Irish tax residents, gains on offshore bonds are subject to Income Tax see
sections 730H to 730K of the Taxes Consolidation Act (TAC) 1997. Gains made
must be included in the tax return and will be subject to income tax at 33%, a
highly personalised bond will also be subject to an extra tax charge of 20%.
There could also be an exit tax on the gains after policy has been held for 8
years.

Italy

Tax residents of Italy are subject to tax on their worldwide income. Individuals
who are not tax resident in Italy are subject to tax on their Italian-source income
only.
An individual is considered resident for income tax purposes if, for the greater
part of the tax year, he or she satisfies any of the following conditions:

His or her habitual abode is in Italy.

The centre of his or her vital interests is located in Italy.

He or she is registered at the Office of Records of the Resident Population

in Italy.

Italian citizens who move their residence for tax purposes to countries
considered to be tax havens (black list countries) are deemed to be tax
resident in Italy in all cases, unless they provide specific evidence of their nonresident status.

Capital Gains Tax

A tax on financial assets held abroad by Italian tax resident individuals (imposta
sul valore delle attivit finanziarie detenute allestero, or IVAFE) took effect in
2012. The tax rate is 0.20% from 2014 onward. The tax base is generally the
market value of the financial asset at the end of the year.
If the transaction involves a qualified percentage of the companys shares, the
ordinary rates are applied to 49.72% (40% if the sale of securities occurred
before 1 January 2009) of the gain. The ordinary rates are applied to 100% of the
gain if the shares sold relate to qualified shares of a company residing in a tax
haven (as defined by the Italian authorities).
Taxation of Overseas Life Policy
Normally taxed deferred and taxed at maturity at 20%.

Malaysia
Residents and non- residents are subject to tax on Malaysian-source income only.
Individuals are considered resident in any of the following circumstances:

They are physically present in Malaysia for 182 days or more during the
calendar year.

They are physically present in Malaysia for less than 182 days during the
calendar year, but are physically present in Malaysia for at least 182
consecutive days in the second half of the immediate preceding calendar
year or in the first half of the immediate following calendar year.

They are present in Malaysia during the calendar year for at least 90 days
and have been resident or present in Malaysia for at least 90 days in any
three of the four preceding years.

Capital Gains Tax

In general, capital gains are not taxable. However, gains derived from the
disposal of real property located in Malaysia and gains derived from the sale of
shares in closely controlled companies with substantial real property interests
are subject to real property gains tax (RPGT).
Taxation of Overseas Life Policy
Malaysia is very territorial with its tax system in that whilst all income deriving
from Malaysia is taxable, foreign income is not. On the face it any income or
gains from an offshore bond would not be taxable in the hands of a Malaysian
resident.

Netherlands
Residents are subject to income tax in the Netherlands on their worldwide
income. Non-residents are subject to tax on specific Netherlands-source income
only.
Residence is determined based on circumstances. For Dutch residency, it is
essential to determine whether the individual has permanent personal ties with
the Netherlands. For this purpose, specific circumstances (social, economic or
legal) are not decisive; all personal ties are relevant .
Capital Gains Tax
Treated as Box 3 income. Savings and investments, including shares and bank
accounts (excluding the value of loans with respect to a primary residence), on 1
January of the calendar year, is deemed to yield income at a rate of 4%. This
income is taxed at a fixed rate of 30%, resulting in a tax burden of 1.2% of the
net value. Specific exemptions apply for certain assets, including art and certain
life insurance policies. A general exemption of EUR21,330 applies for each
resident taxpayer.
Taxation of Overseas Life Policy
All income and gains from investments are treated as Box 3 income which
means that the investment is assumed to grow in value by 4% p.a and the
growth is taxed as income at a flat rate of 30%. This means that the policy is
likely to be taxed at 1.2% of its value each year.
In view of the above gains made at surrender/maturity will be free of taxation.

Qatar
Individuals are considered resident in Qatar in any of the following
Circumstances:

They have a permanent home in Qatar.

They are physically present in Qatar for 183 days or more during a
calendar year.
Their centre of vital interests is in Qatar.

Life policies are not subject to taxation in Qatar as no taxes apply.

There are no taxes on capital gains in Qatar.

Singapore

Individuals are resident for tax purposes if, in the year preceding the
assessment year, they reside in Singapore except for such temporary
absences from Singapore as may be reasonable. This also includes
persons who are physically present or who exercise employment (other
than as a director of a company) in Singapore for at least 183 days during
the year preceding the assessment year. A concession is available for
foreign employees whose employment period straddles two calendar
years. Under this concession (commonly known as the two-year
administrative concession), the individual is considered resident for both
years if he or she stays or works in Singapore for a continuous period of at
least 183 days straddling the two years, even if fewer than 183 days were
spent in Singapore in each year.

Capital Gains Tax

There is no CGT in Singapore.
Taxation of a Overseas Life Policy

Income from overseas is not taxable in Singapore therefore life policy

proceeds should be tax-free.

South Africa

An individual is regarded as a resident for tax purposes under either

the ordinarily resident rule or the physical presence rule.
Under the ordinarily resident rule, an individual is regarded as
resident in South Africa if South Africa is the place, considering all
personal and financial circumstances, to which the individual would
naturally return from his or her travels, and that is the individuals
real home.
The physical presence rule applies if the individual is not ordinarily
resident at any time during a particular year, but is physically
present for more than 91 days in the relevant year and is physically
present for an aggregate of more than 915 days in the preceding 5
years (that is, effectively an average of 183 days per year) and for a
de Minimis period of more than 91 days in each of those preceding
years).
For purposes of determining the 91-day and 915-day periods, a
partial day counts as a full day. If an individualist physically outside
South Africa for a continuous period of at least 330 full days after
the day of last physical presence, under the physical presence rule
that person is not resident for the entire period of continuous
absence.

A person cannot be treated as a South African resident for tax

purposes if he or she is considered to be a resident of another
country under the tiebreaker rules of a double tax treaty
applicable to the relevant income item.

Capital Gains Tax

Capital gains tax (CGT) is imposed through the income tax system by including a
proportion of the calculated gain in taxable income. For residents, CGT applies to
capital gains derived from the disposal of worldwide assets. There is an annual
exemption of currently ZAR 30,000.
Only 33.3% of capital gains (after the exemption) is taken into account for CGT
purposes.

Taxation of Overseas Life Policy

The taxable net gain is currently a proportion of the total capital

gain and this is currently 33.3% for individuals and special trusts
and 66.6% for trusts other than special trusts.

This amount gets included as taxable income and is subject to the

progressive tax
rates for income tax.

Spain
Individuals shall be deemed to be habitually resident in Spain and thus liable to
pay tax based on Spanish residence if they meet any of the following conditions:

1. They spend more than 183 days per calendar year in Spain. There is no
concept of days of arrival or departure: a part day in Spain in classed as a
full day.
2. Their main or central place of business is directly or indirectly located in
Spain.
3. If their non-separated/divorced spouse and or dependent minor children
are habitually resident in Spain, regardless of where the individual
concerned is residing. Even if they are living away from Spain for 365 days
per year they are deemed tax resident of Spain.
4. Spain recognises no change of residence during a fiscal year. That is to say
there are no split years. You are either resident for the full 12 months or
not.
Capital Gains Tax
Capital gains are taxed at a rate of 19.5% on the first EUR5,999.99, at a rate of
21.5% on the amount from EUR6,000 to EUR49,999.99, and at a rate of 23.5% on
the amount from EUR50,000 onward.

Taxation of Overseas Life Policy

Expatriated residents in Spain who have taken out a ordinary international
offshore life policy before moving to Spain, for example from an Isle of Man or
Guernsey life assurance company, can retain their investment while resident in
Spain. However, as such bonds are regarded as foreign policies, Spanish
investment income tax is payable on an annual basis whilst the policyholder is
Spanish tax resident.
So the first 6000 of gains would be taxed at 20%, next 44,000 at 22%.
Holding an EU Spanish compliant policy prevents annual taxation and allows for
tax deferral.

Sweden
Residence

Individuals who are present in Sweden for six months or more and
regularly stay overnight are generally considered resident for tax
purposes.

Capital Gains Tax

Residents are subject to tax on capital gains on both Swedish and foreign shares.
Non-residents are taxed on the same principle if they were tax resident in
Sweden at any time during the 10 calendar years immediately preceding the
year in which the transaction occurred. However, taxation of capital gains
derived from the sale of non-Swedish shares is limited to shares purchased
during the period in which the individual was tax resident in Sweden.
Gains derived from the sale of a primary residence are taxed at a rate of
approximately 22%.

Taxation of Overseas Life Policy

Life policies are divided into two types P & K policies. Overseas Life
Policies are generally regarded as K policies which mean they are
not taxed on maturity or surrender.
Most Isle of Man savings/Lump sum plans are likely to be regarded
as K policies.
K policies are subject to a yield tax of 30% based on a formula of
surrender value as at 1 January plus 100% of premiums paid before
July plus 50% paid after July x the government base rate x 30%.
Normally works out at around 2-2.5% tax.
There is no wealth tax or inheritance tax in Sweden.

Thailand

Individuals are considered resident if they reside in Thailand fora

period or periods aggregating 180 days or more during a calendar
Year.
Income earned overseas by Thai residents is also subject to PIT if it
is remitted to Thailand in the year it is earned.

Capital gains. Gains derived from sales of shares are generally subject to
Thai income tax. However, gains derived from sales of securities listed on
the Stock Exchange of Thailand are exempt from tax. Gains derived from
sales of real property are subject to income tax.
Taxation of Overseas Life Policy
Income received from abroad is only taxable in Thailand if such income is
received in Thailand. If the income is received in future years then this is
treated as capital and should be exempt from PIT.

UAE

No personal taxation currently exists in the United Arab Emirates

No capital gains tax is imposed in the UAE. Capital gains are taxed
as part of regular business profits. The UAE does not impose net
worth tax or estate and gift tax.
As no personal tax exists life policies are not subject to any taxation
in the UAE on gains.

UK
An individual coming to the UK is likely to be regarded as conclusively UK
tax resident if he or she does not meet any conditions to be regarded as
conclusively non-resident and satisfies any of the following conditions:
He or she works sufficient hours (at least 35 hours per week on average)
in the UK, assessed over a 365-day period, with more than 75% of his or
her workdays being UK workdays (full-time working in the UK, or FTWUK).
He or she has his or her only home or all his or her homes in the UK, for
a period of at least 91 days, and at least 30 days of the 91-day period fall
in the UK tax year concerned.
He or she spends at least 183 days in the UK in the UK tax year.
He or she meets the sufficient ties test.
In certain circumstances, it may be beneficial for an individual to be
considered a resident of the United States for income tax purposes. An
individual may make what is known as a first-year election to be treated.
Capital Gains Tax
An individual who is resident and domiciled in the UK is taxed on gains
arising on disposals of assets located anywhere in the world. An individual
who is resident but not domiciled in the UK and who elects to be taxed on

the remittance basis for that year is taxed on disposals of overseas assets
only if the proceeds are remitted to the UK . All individuals who are
subject to UK capital gains tax (CGT) are entitled to an annual CGT
exemption, but this is lost if the remittance basis is claimed.

USA
Definition of resident. Under the substantial presence test, a foreign
national is deemed to be a US resident if the individual fulfils both of the
following conditions:

The individual is present in the United States for at least 31 days during the
current year.
The individual is considered to have been present for at least 183 days during
a consecutive three-year test period that includes the current year, using a
formula weighted with the following percentages:
Current year 100.00%
1st preceding year 33.33%
2nd preceding year 16.67%
For example, 122 days of presence during each of the three consecutive years
causes a foreign national to be considered a US resident under the substantial
presence test.
For IRS filing any US connection, including green cardholders, or accidental
Americans will require a tax return.
Capital Gains Tax
Net capital gain income is taxed at ordinary rates, except that the maximum rate
for long-term gains is limited to the following:
0% for individuals in the 10% or 15% bracket
20% for individuals in the 39.6% bracket
15% for individuals in all other brackets
Net capital gain is equal to the difference between net long-term capital gains
over net short-term capital losses. Long-term refers to assets held longer than 12
months.

Taxation of Offshore Life Policy

Generally treated as a PFIC (Passive Foreign Investment Company) and taxed

on the gains on an annual basis.
Subject to highest marginal rates of tax on such annual gains and interest
surcharges can apply.