IHTM20373 - Life Policies: life policy linked with an annuity: what to do when the Actuarial Team’s advice is received

If the Actuarial Team advises that the associated operations provisions (IHTM20375) do not apply

You should:

Accept that no claim arises under IHTA84/S263.
Accept that exemption under IHTA84/S21 might be available in respect of the premiums on the life policy paid by the deceased.
Explain to the taxpayer that exemption under S21, if due, will only apply to the income element of the annuity in accordance with S21 (3).
Ask the taxpayer to ascertain what part of the annuity is considered to be capital and what part income.
Obtain details of the deceased’s income and expenditure for the years in question to consider whether exemption under S21 is available.

You should

Tell the taxpayer that a claim arises under IHTA84/S263.
Tell the taxpayer that exemption under IHTA84/S21 is not available on the premiums on the life policy paid by the deceased.

The Actuarial Team will advise you what claim for Inheritance Tax, if any, arise in accordance with IHTA1984/S263.