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HMRC internal manual

Insurance Policyholder Taxation Manual

Person chargeable: multiple interests: trusts created by more than one person

In most cases where rights in a policy or contract are held on a UK resident non-charitable trust, the person who created the trust, or settlor, will be chargeable on a gain arising under the chargeable event regime, see IPTM3250.

If there is more than one creator or settlor the share of rights under the policy or contract on which a gain arises is determined by treating each such person as a sole settlor of a separate share.

If property is contributed by different persons at different times, for instance where property is added to an existing settlement, each is treated as a creator in relation to the trust and consequently as a sole settlor.

The share is taken to be the same as the proportion of property contributed by the creator to the trust as it stands immediately before the chargeable event. Property is contributed for this purpose if it originates from the creator, meaning provided directly or indirectly by that person, unless under reciprocal arrangements with another person. A just and reasonable apportionment may be made where necessary.

Further reference and feedback IPTM1013