If An Individual Proposer Changes The Beneficiary of The Insurance Policy from Oneself to Other Pers


National Taxation Bureau of Kaohsiung, Ministry of Finance, states that a gift is where a property owner offers to transfer his/her property gratuitously to the recipient who in turn accepts the transfer. A donor shall file gift tax return to the competent tax authority within thirty days from the date of a gratuitous transfer for gifts made during the calendar year in excess of the annual exemption. A fine that amounts up to two times of the gift tax will be imposed on taxpayers who doesnt file gift tax return on time.

For example, on May 12, 2005, Taxpayer A purchased three 10-yearterm Postal Simple Life Insurance from Chunghwa Post Co. for his/her three children, with Taxpayer A as the beneficiary. ButTaxpayer A then on May 3, 2015 changed the beneficiaries of maturity proceeds of these three policies to his/her three children, respectively. On May 12, 2015, as the policies matured the insurance company paid his/her three children NT7.2 million in totalHowever, it was found that a gift was involved, and declaration of gift tax was not filed. The maturity proceeds the beneficiaries received was found to be a gift from Taxpayer A to his/her children. Thus, the total gift amount in the year of 2015 was NT7.2 million, and the net gift amount was NT5 million. As a result, the gift tax was NT500,000, and a fine of NT500,000 which was doubled of the taxable amount.

The bureau further points out that Taxpayer A was the proposer, and he/her transferred his/her insurance benefits gratuitously to the designated recipient who in turn accepted the transfer. The date when the maturity proceeds were received should be the gift date. Taxpayer A did not file the gift tax return within 30 days of the gift date. Its not an excuse for him/her to be exempt from his/herresponsibility by not understanding the tax law. Thus, based onArticle 44 of Estate and Gift Tax Act and the Reference Table for Fines and Multiples of Punishments, the fine should be doubled of the approved tax payable.

 

Contact: Ms. Lai. TEL:(07)7256600 ext.8706

Reference URL:https://www.mof.gov.tw/Eng/Detail/Index?nodeid=319&pid=76584