IHTM20141 - Life Policies: trusts of life policies: introduction

A life policy is an item of property. As a general rule it can be mortgaged, assigned or placed in trust.

If a life policy is in a trust you must consider all the relevant documents to decide

• what the beneficial interests are,
• whether there is an interest in possession (IHTM16061), and
• if there is an interest in possession, the nature of that interest,

Life policies can present particular problems because they do not usually produce income.

As with other types of property the claims to tax that could arise depend on the construction of the relevant documents. The general principles are explained at IHTM20151-IHTM20170.