Transferring between AV policies
We have been in France for 16 years. We have an assurance vie in Luxembourg and another in the UK. The UK policy now contains practically nothing. Both have been set up for at least 10 years.
We need to close the Luxembourg account (which has sizeable fees) and use at least half of the value to purchase a house. Can we transfer the balance to our British AV and what tax implications would there be? Would QNUPS be a better way to go? R.L.
Life assurance contracts are individual so, if you want to ‘transfer’ one, you effectively have to sell one contract then re-invest in the other contract, incurring the costs as applicable.
As to the fiscal consequence of reinvesting, since the issue is treated as a sale and re-investment, the sale would incur income tax and the social charges that would be due on any gain inherent in the sale of the Luxembourg contract, the amounts of which would depend on your levels of other taxable income.
A QNUPS – Qualifying Non-UK Pension Scheme – less well-known than the similarly-named QROPs (technically now just ROPS), is an overseas pension scheme in which cash and assets that are not eligible for UK tax relief can be contributed. While extra amounts can be freely added over and above UK pension limits, the contract still requires an initial transfer of a pension, so it is not possible to simply create one and add ordinary funds.
Whether you could or should do this, would need to be discussed with an adviser.
Reader's query answered by Hugh MacDonald
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