In this instance the deceased had a right to benefit from a life
insurance policy taken out on another person’s life and held
in trust for the benefit of the deceased (and possibly others).
That right may be settled property (
IHTM16000), and the taxpayer should
have completed form IHT418 (
IHTM16022) giving details as required.
Settled policies are normally treated in the same way as other
settled property, and the matter should be considered on that
basis.
Otherwise the deceased’s interest should form part of
the estate as an absolute interest. The open market value (
IHTM20083) of that interest will depend
upon the policy type, the policy conditions and the age, sex,
health etc of the life assured.
