I have a query on what was, ostensibly, a qualifying IIP, settled in June 2003.
The trust originally held two single premium life assurance bonds, which were funded by cash settled to the trust by A. There was a life interest to his spouse B, and remaindermen their children C & D.
On A’s death in October 2011, the proceeds of both life assurance bonds were paid to the trust as A was the only life assured. They were subsequently reinvested into a new investment bond written on a capital redemption basis ie no lives assured.
B continued to receive distributions from the trust.
B died in January. I have been told that this bond was subject to a periodic charge in June 2013, although there is no evidence of this forthcoming, and asked to calculate the potential exit charges. If the trust is subject to exit charges, this calculation is straightforward enough. What I have struggled to understand, and why I have posted, is what has caused the trust to lose its status as a qualifying IIP?
I’d be grateful, if, from the details given, someone can perhaps shed light on what I cannot see.