Policy protection

A client of mine died recently. He had within a marriage settlement dated 1934 an endowment-type life policy which I suspect was probably insisted upon by his new in-laws to protect his wife who died in 1980.

My client continued to pay the premium after that date and the policy now has considerable value.

In Taxation 1 June 2006 there were replies to a query (Tax free of old) in which a correspondent enquired about the exemption from income tax and capital gains tax for a policy taken out in 1967 i.e. prior to 20 March 1968.

My question now is whether this exemption also applies to inheritance tax.

I would be very grateful for any information and advice that readers can give in this regard.

Query 17 887 –...