Life Policies: Pure Endowment policy linked with a Term Assurance policy: Introduction
- those designed to avoid Capital Transfer Tax completely and sometimes referred to as PETA policies or schemes (IHTM20410)
- those designed to reduce the IHT charge and sometimes referred to as Discounted Gift schemes (IHTM20421)
- those designed to take advantage of CGT exemption and not specifically aimed at Inheritance Tax avoidance or mitigation (usually known as Capital Conversion or Flexible Funding plans) (IHTM20450).
Both PETA schemes and Discounted Gift schemes altered in detail over time as legislative changes were made to combat them in turn. So there are a number of variations on a basic theme, but only Discounted Gift schemes are regularly seen nowadays.