For unit-linked policies (
IHTM20106), IHTA84/S167 (4) provides
for a reduction of the artificial value if the value of the units
at the date of transfer is less than their value at the date they
were allocated.
Example
A takes out a unit-linked policy and pays premiums of
£1,000 p.a. for fifteen years. They then give the policy to B.
At the date of transfer the value of the units is
£9,000. At the date of allocation the value of the units was
£12,000.
The artificial value is therefore reduced by £3,000
(from £15,000 to £12,000).
