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HMRC internal manual

Inheritance Tax Manual

Life Policies: investigating form IHT410: if the answer to Question 14 is Yes

In this instance the deceased had a right to benefit from a life insurance policy taken out on another person’s life and held in trust for the benefit of the deceased (and possibly others).

That right may be settled property (IHTM16000), and the taxpayer should have completed form IHT418 (IHTM16022) giving details as required. Settled policies are normally treated in the same way as other settled property, and the matter should be considered on that basis.

Otherwise the deceased’s interest should form part of the estate as an absolute interest. The open market value (IHTM20083) of that interest will depend on factors such as the policy type, the policy conditions and the age, gender and health of the person whose life was assured.