Life insurance policies and annuity contracts will come under increased scrutiny from HM Revenue & Customs (HMRC) as it cracks down on income tax avoidance.
Budget documents on HMRC's website said people who own life insurance policies, capital redemption policies and life annuity contracts would be affected. Insurers and financial advisers with clients who own the policies or contracts would also be affected.
The document explained the changes apply where there have been gains earlier in the life of the policy or contract - but the gains were not tax chargeable under the income tax rules. It said this could occur, for example, because earlier gains were attributable to a person who was not a UK resident.
HMRC said the rules for calculating the amount of gains from policies or documents would be amended.
It said the amendments would address certain aspects of the current rules which had been "exploited in disclosed avoidance schemes".
HMRC documents said: "This measure supports the government's objective to make the tax system fairer by addressing tax avoidance schemes under which individuals seek to reduce or defer the amount of investment profits on which they are liable to income tax.
"The government believes that the measure will have an impact on a small number of individuals who use such avoidance arrangements at present."
