IHT 205 question 6

Limehill

Hi,

I'm acting as executor for a deceased man of pensionable age who left a will in which almost everything will go to his wife.

I'm stuck on question 6 of the form which reads:

'Did the deceased pay premiums on any life insurance policies that were not for their own benefit or did not pay out to the estate, and did they buy an annuity at any time?'

Specifically the underlined part about the annuity. He, like most pensioners did buy an annuity but it was for his benefit only and expired on his death. No one else did or will benefit.

And is the 'they' meant to be referring to someone other than the deceased?

Do I continue filling in for IHT 205?

Thanks for your help whoever you may be.

Mojisola

Limehill wrote: »

I'm stuck on question 6 of the form which reads:

'Did the deceased pay premiums on any life insurance policies that were not for their own benefit or did not pay out to the estate, and did they buy an annuity at any time?'

And is the 'they' meant to be referring to someone other than the deceased?

I think the 'they' and 'their' refers to the deceased and is a way of not using 'he/she' and 'his/her'.

BobQ

Limehill wrote: »

Hi,

I'm acting as executor for a deceased man of pensionable age who left a will in which almost everything will go to his wife.

I'm stuck on question 6 of the form which reads:

'Did the deceased pay premiums on any life insurance policies that were not for their own benefit or did not pay out to the estate, and did they buy an annuity at any time?'

Specifically the underlined part about the annuity. He, like most pensioners did buy an annuity but it was for his benefit only and expired on his death. No one else did or will benefit.

The purpose of the question is to establish if their are gifts from the estate that are not exempt or assets of the estate that arise from an annuity.

So say he knew he was likely to die in the next 5 years and started paying £10K a year into a life endowment policy that was paid to his children on his death there may be a tax liability in the same way as if he was giving then £5K each a year as a gift in the few years before he died.

Re the annuity the question is trying to find out if he had a type of annuity that continues to pay out after death to someone else (an asset); or if he may have bought a second hand endowment that is now assigned to another beneficiary ; or had an annuity mature in the past seven years that he assigned to someone else (gift). So HMRC would want to see it to check if there was a liability to IHT. So it is a catch all question.

The helpline on the form is very good in my experience, just ask them, but I think the answer to HMRC question is probably "no" from what you say. The question is a little ambiguous I agree and sometimes even if IHT is not due an IHT400 is required just because of a specific event that is not exempt from making a full return.