Germany – Tax rules for unit-linked life insurance policies
Here is a summary of the tax rules for German national when it comes to investments in unit-linked life insurance policies, like portfolio bonds or savings plans from insurance houses like for example Royal London, Friend’s Provident, Generali, Royal London 360. Things are of course changing all the time, and this is my understanding of the situation right now, so make sure to double-check before doing anything.
A German national only has a liability to German tax laws if s/he is resident in Germany or has German source income. As such, whilst s/he is non-resident, the bond or policy does not have to be declared.
When s/he goes back to Germany, the bond or policy does not qualify as a life assurance product under German tax law and therefore, s/he would be subject to tax on any gains within the policy when benefits are taken.
There are straight-forward ways of optimizing the tax bill with proper planning. But that requires a face-to-face discussion since it can depend a lot on your personal situation. I’m here to help if needed. Get in touch with me here via the contact page or call me at +66 909 181910.