Final answer:
When transferring funds between investment portfolios in a variable universal life insurance policy, a policyowner may be subject to tax liabilities depending on various factors. It is important to consult with a professional tax advisor to determine the exact percent of tax liabilities based on individual circumstances and specific tax laws.
Step-by-step explanation:
When transferring funds from one investment portfolio to another in a variable universal life insurance policy, the policyowner may be subject to tax liabilities. The amount of tax charged will depend on various factors such as the tax laws in the jurisdiction and the specific type of transaction being conducted. Generally, when funds are transferred from one investment portfolio to another, it is considered a taxable event, and any gains made on the original portfolio may be subject to taxation.
To determine the exact percentage of tax liabilities, the policyowner should consult with a professional tax advisor who can provide guidance based on their circumstances and the specific tax laws in their jurisdiction. The policyowner needs to understand that tax liabilities can impact the overall return on investment in their variable universal life insurance policy. Therefore, it is recommended to carefully consider the potential tax consequences before making any transfers between investment portfolios.