Reading a chargeable event certificate: every line, and what to do with it
When an offshore bond is surrendered, matures, is sold, pays out on a death or goes over the 5% allowance, the insurer must send you a chargeable event certificate. The law behind it is ICTA 1988 s.552, and it fixes what the certificate must say: the policy number, the nature and date of the event, the amount of the gain, the number of years for top slicing, and whether basic rate tax is treated as paid. For a foreign policy that last line says no. The certificate is not a tax demand and it does not calculate your tax. It gives you two numbers, the gain and the years, which go in boxes 43 and 44 of the foreign pages of your return, and the tax follows from your other income. A £62,400 gain over eight years costs a higher rate taxpayer with £55,000 of salary £26,840 in 2026/27, once the personal allowance taper and top slicing relief are both taken into account. The insurer sends HMRC its own copy when the gain exceeds £18,850, so the figures will be matched.
The chargeable event certificate is one page, and it arrives weeks or months after the event it describes, often addressed to a trustee or a former address. It is the only document HMRC and you both have, so it is worth understanding every entry on it before the figures go on a return. This page goes through the certificate line by line, explains what the insurer is and is not required to tell you, shows where each number goes, and deals with the three things that go wrong: no certificate, a certificate with the wrong years, and a gain that bears no relation to the money you actually made. How HMRC otherwise learns about an offshore policy, and the reporting rules in full, are on a separate page.
By Eldar Edmond Grady, CEO, PPLI.com. Research checked 19 October 2026. Covers UK law for 2026/27 as it applies to a UK-resident individual who has received a certificate for a policy issued by a non-UK insurer. The Autumn Budget on 28 October 2026 had not been delivered when this was checked.
What the certificate is, and who must send it
A chargeable event certificate is the insurer's statutory notice that an event has happened on your policy and that a gain has arisen. The duty to issue it sits in ICTA 1988 s.552, one of the few parts of that Act still in force, and it applies to every insurer with policies held by UK residents. An insurer outside the UK whose UK-resident policies carry total premiums of £1 million or more must appoint a UK tax representative to carry out the duty, or make alternative arrangements that HMRC approves (s.552A). This is why a certificate from a Dublin or Isle of Man insurer looks much like one from a UK insurer: the same section governs both.
The certificate must be sent to the policyholder, or to the person liable, within set periods: three months after the event for a surrender or maturity; three months after the end of the insurance year for a part surrender that goes over the allowance; and three months after the insurer is told in writing of a death or an assignment (s.552(6)). HMRC can require a certificate from an insurer within thirty days (s.552(4)); a policyholder who has not received one should ask the insurer, and the gain is reportable whether or not the certificate arrives.
What the law says it must show
Section 552(5) lists the contents. A unique identifier for the policy. The nature of the event and its date. The amount of the gain. The number of years for top slicing relief. Whether income tax at the basic rate is treated as paid on the gain. And, only where the event is an assignment of all the rights for money or money's worth, the figures needed to calculate the gain, including the premiums paid. That last point surprises people: on an ordinary surrender certificate the insurer is not required to show the premiums, the withdrawals or the working, only the result. Most do show some of it, and you are entitled to ask for the rest.
What the certificate does not show is your tax. It does not know your other income, your residence history or whether you have other gains in the year, so it cannot apply top slicing relief, the personal allowance or the time apportionment reduction for years abroad. Those are yours to work out, and the sections below say how.
Line by line
Policy number and segments. A bond in segments is a cluster of separate policies, and a surrender of some segments produces a certificate for those segments only, sometimes one per segment. Check that the segments on the certificate are the ones you surrendered.
Nature of the event. Full surrender, maturity, death, assignment for money or money's worth, or an excess on a part surrender. The nature matters because it decides how the years are counted and, for a death, whose income the gain is.
Date of the event. For a surrender, the date the insurer processed it; for a death, the date of death; for an excess, the last day of the insurance year, which ends the day before the policy anniversary and not on 5 April. The date fixes the tax year, and a part surrender taken in March may produce an excess dated in the following tax year if the policy anniversary falls after 5 April.
Amount of the gain. For a final event, the value paid out plus all earlier withdrawals, less all premiums paid and any gains already charged (ITTOIA 2005 s.491). For an excess event, the amount by which cumulative withdrawals exceed the cumulative 5% allowance. A certificate will usually show the gain before any reduction for years of non-residence, since the insurer does not generally know where you lived; if you were non-resident for part of the policy period the reduction under s.528 is yours to calculate and claim, as our page on moving to, returning to or leaving the UK with an offshore bond explains.
Number of years. The complete years the policy has run, for a final event, or since the last chargeable event for an excess on a UK policy or a post-2013 offshore one (IPTM3830). It is never less than one. This number does not change the gain; it is the divisor for top slicing relief, which is why a wrong figure here costs real money.
Tax treated as paid. Yes for a UK policy, where the fund has borne corporation tax and you are credited with basic rate tax under s.530. No for a foreign policy, unless it was issued by a UK branch of a foreign insurer (IPTM3810). On an offshore bond certificate this line is the one that tells you the whole gain is taxable at your marginal rate.
An example certificate, and what it costs
| Entry | Shown as | Meaning |
|---|---|---|
| Policy | XX1234567, segments 1 to 50 | All fifty segments surrendered together |
| Nature of event | Full surrender | A final event; the years run from the policy start |
| Date of event | 15 May 2026 | Tax year 2026/27; tax due 31 January 2028 |
| Amount of gain | £62,400 | Surrender value plus withdrawals less premiums; before any non-residence reduction |
| Number of years | 8 | Divisor for top slicing: slices of £7,800 |
| Basic rate tax treated as paid | No | Foreign policy; the whole gain is taxed as savings income |
Suppose the policyholder is a higher rate taxpayer with £55,000 of salary and no other savings income. Her adjusted net income for the year becomes £117,400, so the personal allowance tapers from £12,570 to £3,870. The gain of £62,400 sits partly in the higher rate band, with £500 of it covered by the personal savings allowance. Top slicing relief on slices of £7,800 comes to £1,400. The extra tax caused by the gain, including the tax on salary that is no longer covered by the lost allowance, is £26,840. None of that appears on the certificate; all of it appears in our top slicing relief calculator, which takes the two numbers from the certificate and the rest from you. The relief itself is explained on our page on top slicing relief and chargeable event gains.
Where the two figures go
For a foreign policy the gain goes on the foreign pages, SA106, at box 43 and the number of years at box 44; box 45 (tax treated as paid) is completed only for a policy issued by a UK branch of a foreign insurer, and where there are gains on more than one foreign policy the notes say to leave boxes 44 and 45 blank and list each policy's years in the additional information box (SA106 notes 2026). For a UK policy the same two figures go on SA101 (SA101 notes 2026). Who files what if you are not in Self Assessment, the trustees' and executors' forms, when the tax is due and how the Common Reporting Standard fits in are all on our page on reporting an offshore bond gain to HMRC.
Does HMRC get a copy?
Often. The insurer must send HMRC its own copy where the event is an assignment for money or money's worth, or where the gain, together with any connected gains, exceeds half the basic rate limit, which is £18,850 for 2026/27 (s.552(2)), within three months of the end of the tax year (s.552(7)). For any gain of that size, assume HMRC has the figure and will match it against your return.
Checking the certificate
Most errors show up under one of three checks. First, the years. Count the complete years from the policy start date to the event for a final event, and from the last chargeable event for an excess; an insurer's system that counts from an assignment or a top-up has got it wrong, and the error reduces your relief. Second, the premiums. Ask for the premium history if it is not shown, and reconcile it with your own records, especially where an adviser's initial fee was taken before investment and so is not part of the premium. Third, withdrawals. Every earlier withdrawal within the 5% allowance should have been added back, and every earlier excess gain should have been deducted; an insurer that has missed a prior excess will overstate this gain. Where you were non-resident for part of the policy period, apply the s.528 reduction yourself and keep the day counts.
No certificate, or the wrong figures
The gain must be reported whether or not a certificate arrives. HMRC's helpsheets say to chase the insurer, the trustees or the nominee who holds the policy, and to tell the insurer about an unreported death or sale so that a certificate can be issued. A certificate that goes to a former address is still your gain.
Where the certificate is correct but the gain is absurd, which happens with a large part surrender taken across all segments in the early years, the remedy is ITTOIA 2005 s.507A: if the gain is wholly disproportionate to the economic gain, the person liable can apply in writing within four tax years after the year the gain arose, and HMRC must recalculate it on a just and reasonable basis. HMRC's threshold for this is high, and the application is not available where the policy was used in a tax avoidance arrangement. Our page on the 5% allowance explains how such gains arise and how to avoid them.
Where a certificate for an earlier year was never reported, the Worldwide Disclosure Facility is the route: a notification through HMRC's digital disclosure service, then ninety days to make the disclosure and pay, with the Requirement to Correct penalties applying to offshore matters since 1 October 2018 (gov.uk, Worldwide Disclosure Facility). Where HMRC already holds a copy of the certificate, the disclosure is better made before HMRC writes first.
Questions about chargeable event certificates
What is a chargeable event certificate?
The insurer's statutory notice, required by ICTA 1988 s.552, that a chargeable event has occurred on your policy. It shows the policy, the event and its date, the amount of the gain, the number of years for top slicing relief and whether basic rate tax is treated as paid. It does not calculate the tax you owe.
Do I need to send the certificate to HMRC?
If you file a Self Assessment return, no: you enter the gain and the years on SA106 for a foreign policy or SA101 for a UK policy and keep the certificate. If you are not in Self Assessment and the gain plus other savings income is £10,000 or less, HMRC's helpsheet says to contact HMRC or send the certificate with your National Insurance number to Self Assessment, HMRC, BX9 1AS.
What does number of years mean on the certificate?
The number of complete years used to divide the gain for top slicing relief. For a surrender, maturity, death or sale it is the complete years since the policy started; for an excess on a part surrender it is the years since the last chargeable event. It is never less than one and it does not change the gain, only the relief.
Why does my certificate say no basic rate tax is treated as paid?
Because the policy is a foreign policy. A UK insurer's fund has already paid corporation tax, so the policyholder is credited with basic rate tax under ITTOIA 2005 s.530; an offshore insurer's fund has paid nothing, so there is no credit and the whole gain is taxed as savings income at your marginal rate.
What if I never received a certificate?
The gain is still taxable and must be reported. Ask the insurer for one, and check with trustees or nominees who may have received it. If a death or sale has not been reported to the insurer, report it so that the certificate can be issued.
Can the gain on the certificate be wrong?
Yes. The common errors are a wrong year count, a missed earlier excess gain, and premiums that include an adviser fee taken before investment. Reconcile the certificate with your own records and ask the insurer to reissue it if it is wrong. Where the gain is correct under the rules but wholly disproportionate to the real growth, an application to HMRC under ITTOIA 2005 s.507A can have it recalculated.
Does HMRC get a copy of the certificate?
Where the gain exceeds half the basic rate limit, £18,850 in 2026/27, or the event is a sale, the insurer must send HMRC a copy within three months of the end of the tax year. HMRC also receives information on offshore policies under the Common Reporting Standard. For any sizeable gain, assume HMRC has the figure.
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.
Sources and authorities
Read as at 19 October 2026 for the tax year 2026/27. The example certificate is hypothetical and its figures were run through our top slicing relief calculator, which follows HMRC's method in IPTM3820 to IPTM3850. Form references are to the 2026 editions of SA101, SA106 and their notes.
- ICTA 1988 s.552: the insurer's duty to issue certificates, their contents and timing. s.552A: overseas insurers and UK tax representatives.
- ITTOIA 2005 s.491: calculating the gain. s.507A: recalculating wholly disproportionate gains. s.528: reduction for non-UK policy years. s.530: tax treated as paid.
- HMRC Insurance Policyholder Taxation Manual: IPTM3240 (death and personal representatives), IPTM3810 (tax treated as paid), IPTM3830 (number of years).
- HMRC helpsheets HS320 and HS321; SA101 notes 2026; SA106 2026 and SA106 notes 2026.
- gov.uk, Worldwide Disclosure Facility (updated 6 April 2026); income tax rates and allowances for the basic rate limit of £37,700.
Last updated: 19 October 2026. See our editorial standards for how articles are researched and corrected.
Eldar leads PPLI.com’s strategy, research and partnerships. He acquired PPLI.com in 2020 and has worked on private placement life insurance since then.
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