Policy problem

It is well known that monthly withdrawals from a life assurance policy that are restricted to 5% do not give any income tax consequence but what if the policy is an asset held by an accumulation and maintenance trust and the monthly withdrawals are paid out to the beneficiary?

If they are treated as withdrawals of capital will a form IHT100 not be required for every one?

I have recently been appointed to act professionally on behalf of such a trust in this situation. The trust is not Budget 2006 compliant and the assets are not to vest until the beneficiary is 25.

I should be most grateful if Taxation readers could provide advice on the inheritance tax and other tax implications that might be relevant here.

I look forward to advice with interest.

Query 17 294 — L.A.

Reply by The Snark:

I have a very long...