Selling - If you are the original beneficial owner of the policy that you are selling, you will not be liable to capital gains tax.
If you hold a qualifying policy and sell it after 10 years (or three quarters of its term whichever is less) the sale will not trigger what is known as a chargeable event* and there will be no income tax to pay. If you sell your policy within 10 years or three quarters of its term, it will no longer be classed as a qualifying policy and will trigger a chargeable event.
Non qualifying policies will always trigger a chargeable event.
If you are already a higher rate taxpayer or the sale proceeds (after top slicing) make you one, there will be income tax to pay of 18% on the gain.
* A chargeable event can occur in the following situations:
On the death of the life assured
On the maturity of the policy
On total surrender of the policy
On the assignment of a policy to another person for Money or moneys worth
On surrenders over 5% each year (cumulative over a Twenty year period)
