Still Uncertain

Still Uncertain

The tax treatment of life policies in trust is examined by JOHN WOOLLEY.

FINANCE ACT 2004 set out the pre-owned assets tax rules which became effective from 6 April 2005. Although Sch 15 of the Act sets out the structure of the legislation the details on quantifying the taxable benefit are set out in regulations. In particular the regulations set out the dates on which assets are valued and the amounts of benefit that the donor is deemed to enjoy from those assets for income tax purposes. The regulations were released with the Chancellor's 2005 Budget press releases and at the same time the Inland Revenue released guidance as to how the rules will operate.

This article is concerned with the impact that the regulations have on pre-owned assets tax in respect of gifts of intangibles particularly life policies in trust. For these...