IHTM20557 - Split or retained interest trusts: regular premium arrangements: what to do

The creation of the split trust should be returned on the IHT403 as a lifetime transfer if it was set up within seven years of the death. Any premiums paid on that policy after the policy was placed in trust and within seven years of the date of death should be returned as lifetime transfers.

The policy should also be disclosed on the IHT410 as a policy on which the deceased paid premiums and in respect of which sums were payable by an insurance company as a result of the deceased’s death. However the value paid out on death will not be part of the deceased’s estate where it becomes payable to the beneficiaries of the trust.

You should obtain a copy of the policy schedule and the trust documents and then refer these to the Actuarial Team to consider whether the value of any lifetime transfer can be accepted and to consider whether any claim under IHTA84/S3(3) arises.