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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Lifetime transfers: gifts with reservation (GWRs): insurance policies: change in life assured

A change in the life assured under a policy is sufficiently fundamental to bring into being a new contract of insurance.

If a policy was written before 18 March 1986 subject to a GWR trust and an option was exercised on or after that date to change the life assured, this would create a new contract.

Consequently, the GWR rules would apply to premiums paid after the exercise of the option, which created the new contract but not to premiums paid earlier (assuming the original policy had not previously been varied (IHTM14433)).