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New queries, issue 4347

27 March 2012
Issue: 4347 / Categories: Forum & Feedback
20 years ago today; Shine a light; Railway to Welwyn; Scrap income

20 years ago today

Our client is a trustee of a life policy settled in trust nearly 20 years ago and which has remained unchanged throughout.

It is an ‘interest in possession trust’ and at the outset the settlor gave his then wife a life interest in the policy proceeds.

After the death of his first wife (which occurred in October 2010) the interest in possession passed to a lady friend who by that time had become his wife in May 2006 several years after he had divorced his first wife.

The value of the life policy in trust is only around £60 000 and no returns have been made to HMRC because no taxable events have arisen.

It has only just come to my notice that perhaps the trustees should have notified HMRC of the termination of the first life interest and that some inheritance tax...

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