Pre-owned assets: insurance based products: policies settled on trusts before 18 March 1986
Where a life policy was settled on trusts before 18 March 1986 and premiums continue to be paid after that date, there is a specific exemption from the reservation of benefit provisions where the premiums continue to be paid at the previous level or at a pre-determined increase in rate (IHTM14434). Nevertheless, any premiums paid on or after 18 March 1986 are additions to the settled property and, if the settlor is a potential beneficiary under trust, will be within the POA charge under FA04/Sch15/Para8. The proportion of the settled property - the policy valued on an open market basis - in charge will be by reference to the premiums paid before 17 March and on or after 18 March 1986. This proportion is likely to increase year on year as more premiums are paid - although the chargeable amount will be subject to the de minimis exemption (IHTM44056).