IHTM20241 - Life Policies: policy on the deceased’s life not connected with any other transaction (except a trust): policy effected by the deceased for their own benefit but gifted later: special rule: introduction

IHTA84/S167 provides special rules (that apply to lifetime transfers only) for the valuation of:

• policies of insurance payable on a person’s death
• contracts for deferred annuities payable from a person’s death.

The rules provide a minimum value which is, broadly, the amount of the premiums paid less any sum received under the policy or contract before the transfer. So this special value is only used if it exceeds the open market value (IHTM20083).

Guidance on the exclusions to and a modification of this rule can be found at IHTM20242 - IHTM20244