According to a Daily Telegraph report, the UK’s Inland Revenue has indicated that it will not target insurance-based plans designed to mitigate the effects of inheritance tax, allowing donors to retain some benefits accruing from gifts.
The Revenue recently began a clamp-down on home owners who use trust arrangements to give away their homes whilst still deriving a benefit from them by living there, thus escaping liability for inheritance tax.
However, this attack does not appear to extend to ‘discounted gift’ insurance plans, according to information recently provided by the Revenue to the Association of British Insurers. Such plans allow assets to be deposited into a trust whilst income from a fund can be retained.
"The Revenue confirmed that the discounted gift arrangements they had seen so far fall outside the scope of the current proposals,” a spokesman for the ABI was quoted by the Telegraph as announcing.
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