Chapter 5 - Taxation of Life assurance and pension based protection policies

Question 1

Peter has a qualifying life policy with a term of 20 years. What type of change would potentially result in a chargeable event?

Answer 1

Assignment for money’s worth within the first ten years.

Question 2

Raj is paying an annual premium for an inheritance tax [IHT] funding policy. In order for these premiums to be treated as annual exempt lifetime transfers for IHT purposes, they must normally not exceed:

Answer 2

£3000

Question 3

Where a chargeable gain arises under a life policy it is the responsibility of the:

Answer 3

policyholder to declare the gain on their tax return for the tax year in which the chargeable event occurs.