Calculating periodic tax charge for WOL in discretionary trust
elmacdon
Member
Hi
I am hoping someone can help.
I am having trouble finding out how we would value a guaranteed whole of life policy which is held in a discretionary trust if the life assured is in poor health. Where they are in good health at the 10 year anniversary I understand that the value would be based on the premiums paid as the plan has no surrender value. Where they are in poor health I think the plan has a higher value. Is it the sum assured? The only guidance I have found is that the Trustees would need to discuss with HMRC and agree a value. Can anyone add to this? Many thanks, El
I am hoping someone can help.
I am having trouble finding out how we would value a guaranteed whole of life policy which is held in a discretionary trust if the life assured is in poor health. Where they are in good health at the 10 year anniversary I understand that the value would be based on the premiums paid as the plan has no surrender value. Where they are in poor health I think the plan has a higher value. Is it the sum assured? The only guidance I have found is that the Trustees would need to discuss with HMRC and agree a value. Can anyone add to this? Many thanks, El
Comments
The level of discount is going to depend on what 'poor health' means.
The value is what a willing buyer would pay for this policy - so taking into account the sum assured, the now likely life expectancy of the life assured and the level of premiums payable.