IHTM20153 - Policy settled on its own trusts:
Life interest in favour of a beneficiary other than the
settlor
If
- the only property settled is a policy on
the life of the settlor, and
- a beneficiary other than the settlor is
given a life interest, and
- there is no clear indication that the
beneficiary is not to receive any income produced during the
settlor's lifetime
the beneficiary should be regarded as having an interest in
possession (
IHTM16061) in the policy.
Under English law a beneficiary has an interest in possession
in a policy if they have
- a vested defeasible (
IHTM16066) interest in possession, for
example
- an absolute interest in possession under a
revocable appointment
- an absolute interest in possession in default of
the exercise of a power of appointment in favour of someone
else
- an absolute interest in possession
defeasible if they fail to survive a given event or on the
occurrence of a given event.
See examples at
IHTM20154 (England, Wales and Northern
Ireland) and
IHTM20155 (Scotland).
