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HMRC internal manual

Insurance Policyholder Taxation Manual

From
HM Revenue & Customs
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Other types of assignments

Assignment to a trust by a settlor or from a trust to a beneficiary

An assignment of a policy or a contract by a settlor into trust, or from a trust to itsbeneficiary or beneficiaries will not normally be for money or money’s worth andconsequently will not be a chargeable event. Insurers may assume that there is nochargeable event unless there is information to suggest that the assignment was for moneyor money’s worth.

Assignment to a will beneficiary

Similarly, the assignment of a policy or contract from the executors of a will to abeneficiary under the will is unlikely to be for money or money’s worth.

Assignments between a director or other employee and a company

In general, any assignment between a company and an employee is unlikely to be a giftand is likely to be for money or money’s worth. Insurers should assume this is thecase unless there is strong evidence to the contrary. There may be personal taximplications where the policy is assigned to the employee but not under the chargeableevent regime.

Where a company director who is also a shareholder assigns a policy or contract to thecompany the assignment will almost certainly be for money or money’s worth since theshares held are likely to be worth more after the assignment than before.

Assignments between connected persons other than spouses or civil partners

If there is an assignment of a policy or contract between connected persons within themeaning of ICTA88/S839 other than spouses or civil partners livingtogether then it is a chargeable event if for money or money’s worth.

Where there is a whole assignment for money or money’s worth in these circumstances,the value of the assignment is taken in the chargeable event calculation to be the marketvalue of the policy at the time of the assignment. Insurers do not, however, need toreport the value of a whole assignment.

Further reference and feedback IPTM1013