What HMRC learns about an offshore policy

Written on UK law and HMRC guidance as at 23 September 2026, for the tax year 2026/27. A timeline of every report, from purchase to surrender, comes after the four channels.

Private from the public, visible to HMRC

A policy's reporting goes to you and to tax authorities, never to a public register. But a bank abroad holding the same investments would report them to HMRC too, under the same Common Reporting Standard, so the policy does not reduce what HMRC sees. It changes the form of the reporting, to one value a year from the insurer and a certificate when there is a gain, in place of a stream of dividends, interest and disposals from each holding.

A policy is no way of keeping assets from HMRC. What it does offer is tidy reporting. The insurer calculates the gain, sends you a certificate and, for larger gains, sends HMRC a copy; your job is to put the same figure on your return.

Who else can see the policy, including courts, the probate record and your family, is covered on the page on privacy and reporting. This article deals only with HMRC.

Channel 1: the Common Reporting Standard

The insurer is a reporting financial institution

Under the automatic exchange of information agreements, a “Specified Insurance Company” is “an entity that is an insurance company, including a holding company in an insurance group, that writes products classified as Cash Value Insurance Contracts or Annuity Contracts or makes payments with respect to such contracts” (IEIM400840). A cash value insurance contract is “an insurance contract where the policyholder is entitled to receive payment on surrender or termination of the contract” (IEIM401640). Every offshore bond has a surrender value, so every offshore bond is a reportable account. Term life insurance with no investment element is not.

What is reported

Sources: IEIM402005 (reportable information), IEIM402120 (balance or value) and IEIM402260 (payments on other accounts). The CRS report does not calculate a chargeable event gain. It gives HMRC the policy, its value and the money paid out, and the gain arrives through the second channel.

Who sends it, and when

An offshore insurer reports to the tax authority where it is based, which passes the data to HMRC under the exchange agreements. A UK financial institution reports to HMRC by 31 May following the calendar year (IEIM400580); other jurisdictions set their own timetables. Guernsey, for example, applied the CRS from 1 January 2016, with first reporting in 2017 (States of Guernsey: CRS).

Pinsent Masons describe the UK as an early adopter of the CRS, implementing it through the International Tax Compliance Regulations 2015, covering accounts from 1 January 2016, with first exchanges in September 2017 (Pinsent Masons). So for any bond held in the last decade, assume HMRC has had its value every year.

When trustees hold the policy, who appears on the report depends on how the trust is classified under the CRS rules. Expect the trust's settlor, trustees or beneficiaries to be reported in some form; the details depend on the trust.

Channel 2: chargeable event certificates

The duty

Offshore insurers must issue chargeable event certificates on the same basis as UK insurers for policies taken out after 6 April 2000 (IPTM3210). The duty is in section 552 of the Income and Corporation Taxes Act 1988, not in ITTOIA 2005, which holds the charging rules.

• To you. Unless it is satisfied that no gain arises, the insurer must send a certificate to the policyholder before the end of the “relevant three month period”.
• To HMRC. The insurer must also send a certificate to HMRC where the event is an assignment for money or money's worth of the whole of the rights under the policy, or where the gain, together with any connected gains, exceeds one half of the basic rate limit. With the basic rate limit at £37,700 for 2026/27, that threshold is £18,850.

The three months run from different dates depending on the event. For most events it is three months after the event. For a part surrender or part assignment that produces an excess, it is three months after the end of the insurance year in which the event happens. For a death or an assignment, it runs from the insurer's receipt of written notification. The certificate sets out the event and its date, the gain and the figures behind it, including premiums paid, earlier gains and the number of years used for top-slicing relief.

Section 552ZA fills in the detail: one certificate can cover several part surrenders in the same year unless there was an assignment in between, a certificate is due to each joint policyholder whose address the insurer has, and HMRC can require insurers to supply information and make records available.

The UK tax representative

An overseas insurer whose policies held by UK residents reach gross premiums of £1 million or more must nominate a UK tax representative within three months, and HMRC must approve the nomination (s.552A). The representative, a UK resident individual or a body with a UK business establishment, is responsible for the insurer's UK information duties. HMRC can release an insurer from the requirement by agreement, on conditions. For a family, it means the insurer's UK reporting has a UK address behind it.

Time spent abroad

The certificate shows the full number of years the policy has run. If you were non-UK resident for part of that time, you claim time-apportionment relief yourself and, for top-slicing relief, subtract the whole number of years you were non-resident from the years on the certificate (HS321). HMRC will see a certificate figure larger than the gain you declare; the difference should be explained by the relief on your return. How the relief works is in moving to, returning to or leaving the UK with an offshore policy.

Channel 3: your own tax return

Gains on foreign policies go on the SA106 foreign pages, in the section for other overseas income and gains. Trustees use the SA904 foreign pages of the trust return. Gains on UK policies go on SA101 instead (HS321).

The gain is savings income, taxed at 20%, 40% or 45% in 2026/27 depending on your other income, with no basic-rate credit because the insurer is offshore. Top-slicing relief can reduce the tax: you enter the number of complete years on the return and HMRC works out the relief. Worked examples are in chargeable event gains and top-slicing relief.

Most mistakes are made here, and two come up again and again. One is leaving a gain off because the 5% withdrawals felt tax-free for years; they are tax-deferred, and an excess or the final surrender brings them back into the calculation (the 5% withdrawal allowance). The other is assuming HMRC does not know about a gain below £18,850. HMRC does not receive that certificate, but it does receive the CRS report showing the part surrender or the closing payment.

Channel 4: the Trust Registration Service

A trust that holds an investment bond must register on the Trust Registration Service. HMRC's manual excludes trusts holding only policies that pay out on death, terminal or critical illness, disablement or healthcare costs, and keeps them excluded for up to two years after the death. It does not extend that exclusion to investment bonds, which “are designed to provide regular or periodic payments to the policyholder in the form of surrenders or part-surrenders during the term of the policy” (TRSM23030).

Registration deadlines depend on the trust. A non-taxable trust created after 6 October 2020 must register within 90 days of creation or of becoming liable for tax; a taxable trust created on or after 6 April 2021 within 90 days of becoming liable for tax (gov.uk: register a trust as a trustee).

The register is not public. Third parties can obtain data only where a requester shows a legitimate interest because they are investigating a specific suspected case of money laundering or terrorist financing, or where a trust has a controlling interest in an offshore company or other entity that is not a UK or EEA entity (TRSM60020). Law enforcement agencies and other competent authorities have access separately. Loan trusts and discounted gift trusts are covered in loan trusts and discounted gift trusts with an offshore bond.

Timeline: what is reported, from purchase to surrender

The table follows a hypothetical £2,000,000 bond held by a UK resident individual, with one line for a trust. It shows the reporting rules, not what any particular insurer does in practice.

Suppose the full surrender in year 12 produces a gain of £640,000. HMRC gets the certificate direct from the insurer, because £640,000 is more than £18,850; it has a CRS value for the policy for every year it has been reported; and it expects the same £640,000 on your SA106, less any time-apportionment relief you claim with the working shown.

If something was missed

If gains from an offshore policy were not reported in earlier years, HMRC's Worldwide Disclosure Facility is the route for disclosing a UK tax liability that relates wholly or partly to an offshore issue. You notify HMRC first, then have 90 days to make the disclosure, including tax, interest and penalties (gov.uk: Worldwide Disclosure Facility). Given what HMRC already holds through the CRS and certificates, it is better to come forward before it writes to you.

Leaving the UK

The CRS report goes to the jurisdiction to which the information is reportable, which follows your tax residence as recorded by the insurer. Tell the insurer when you leave or arrive, with a new self-certification, so the right authority receives the report. Leaving does not end UK inheritance tax exposure straight away: long-term UK residence can last 3 to 10 tax years after departure, subject to transitional rules for people who were non-resident in 2025/26 (inheritance tax and the long-term residence test). If the insurer itself is a concern, see what happens if an offshore life insurer fails.

HMRC and offshore policies: questions

Does HMRC know about my offshore bond?

It does. The insurer is a Specified Insurance Company under the Common Reporting Standard and reports your identity and the policy's cash or surrender value, normally at 31 December, to its own tax authority, which exchanges the data with HMRC. Part surrenders paid during the year are reported too.

What is a chargeable event certificate?

A statement from the insurer setting out a chargeable event, such as a surrender or an excess withdrawal, and the gain arising, with the figures behind it. Under ICTA 1988 s.552 the insurer must send it to you within three months, and offshore insurers must do so on the same basis as UK insurers for policies taken out after 6 April 2000 (IPTM3210).

When does the insurer send the certificate to HMRC as well?

When the policy is assigned for money or money's worth, or when the gain, together with any connected gains, is more than half the basic rate limit. For 2026/27 that is £18,850. Below that, only you receive the certificate, but HMRC still has the CRS report of the payment.

Where do I report an offshore bond gain on my tax return?

On the SA106 foreign pages, as other overseas income and gains. Trustees use SA904. Gains on UK policies go on SA101 instead (HS321). The gain is savings income, taxed at 20%, 40% or 45% in 2026/27, with no basic-rate credit on an offshore policy.

What is a UK tax representative?

A UK resident person or a body with a UK business establishment, approved by HMRC, that an overseas insurer must nominate once gross premiums on its policies held by UK residents reach £1 million (ICTA 1988 s.552A). It is responsible for the insurer's UK information duties. HMRC can release an insurer from the requirement by agreement.

Does a trust holding an offshore bond have to register with HMRC?

It does. Trusts holding only protection policies that pay out on death or illness are excluded, but investment bonds pay out through surrenders during their term, so a trust holding one must register on the Trust Registration Service (TRSM23030). A non-taxable trust created after 6 October 2020 has 90 days from creation.

Can anyone else see the Trust Registration Service entry?

Not the public. Third parties can obtain TRS data only where they show a legitimate interest because they are investigating a specific suspected case of money laundering or terrorist financing, or about a trust with a controlling interest in an offshore company or other entity outside the UK and EEA (TRSM60020). Law enforcement agencies and other competent authorities have access separately.

I did not report a gain in an earlier year. What should I do?

Use HMRC's Worldwide Disclosure Facility, which is for UK tax liabilities that relate wholly or partly to an offshore issue. You notify HMRC first and then have 90 days to make the disclosure, calculating the tax, interest and penalties. HMRC may already hold the CRS data and any certificate for the gain.

Sources and authorities

CRS: IEIM400840, IEIM401640, IEIM402005, IEIM402120, IEIM402260, IEIM400580; States of Guernsey: CRS; secondary: Pinsent Masons. Certificates: ICTA 1988 s.552, s.552ZA, s.552A; IPTM3210. Returns: HS321 (2026); gov.uk: income tax rates. Trusts: TRSM23030, TRSM60020, gov.uk: register a trust. Disclosure: Worldwide Disclosure Facility.

Research checked 23 September 2026 against the statutes and HMRC guidance linked above. For how articles are checked and corrected, see our editorial standards.

PPLI.com is not authorised by the Financial Conduct Authority and does not give personal advice. This is general information about UK law, not an invitation or inducement to enter into any insurance or investment contract. Policies issued by insurers outside the UK are not protected by the Financial Services Compensation Scheme.