CLT on joint assignment of policies to Trust


(Karl Taylor) #1

I am dealing with Ws estate, which is over £1m. H&W assigned a joint policy to a Flexible Gift Trust in 2012. Discretionary - with spouse and issue as potential benefs . Value below NRB.

Is it the case that a half share of the value at the assignment date in 2012 is deducted from Ws NRB, thereby impacting the TNRB available on Hs estate? If not, how should this be treated in the IHT Account?

Estate all to H, so spouse exempt but IHT 400 required as over £1m and high value joint assets.

There is another policy that was assigned about the same time in Ws sole name. This was paid by ongoing monthly premiums, which I believe continued to date of death (I have requested confirmation). Am I correct these can be claimed as ‘Gifts out of Excess Income’ from the assignment date to date of death, though the value at assignment date will be a capital CLT?

Karl Taylor
Parker Rhodes Hickmotts


(malcfinney1) #2

May be worth examining HMRC’s IHT Manual e.g.
https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm20303

It seems that the spouses are potential beneficiaries which I would have thought was very unusual for flexible gift trusts.

Malcolm Finney