Life Insurance - Trust

ET100

I have a question about trust funds.  I have a life insurance policy which I have in trust (Gift Trust) and I wanted to ask if there are any tax actions I need to take or my trustees need to take at this stage.  My initial understanding was that the policy is in trust - so no longer mine as such - so I have no tax implications.   Regarding my trustees - they are the trusted few who will manage this trust when the time comes so again no tax implications.  But I was reading something about a 10 year anniversary tax for trustees.    Are trustees liable for paying tax on a life policy?  Or have I misunderstood this one and it purely relates to cash gifts ( in trust)   

Keep_pedalling

There should be no tax implications while you are alive, but it gets a bit more complicated after that especially if you have created a discretionary rather than an absolute trust.  With a DT you also have to be aware of the 14 year rule.

https://www.mandg.com/wealth/adviser-services/tech-matters/iht-and-estate-planning/gift-trust/gift-trusts#:~:text=A%20Gift%20Trust%20is%20an,changed%20at%20a%20future%20date.

Keep_pedalling

In another thread you say your brother is a beneficiary and trustee. What happens if he dies first? Are there any other beneficiaries and if so are any of them adults?

Appointing a sibling as a trustee or sole executor of your will is not recommended if you have people of a younger generation who could fill that roll.

ET100

There is only the two of us so no there will not be any other beneficiaries so the cover would stop and would no longer be required.  

ET100

It is purely a life cover and nothing more.   I have a home and there will be some IHT on it.  My brother will not be able to afford the IHT unless he sells and the insurance is in place for this purpose.   He would be the trustee and would use this payout to make that IHT payment.  So the monies are already spoken for - he himself would not benefit from any cash payment as the sum is already allocated       

Keep_pedalling

ET100 said:

It is purely a life cover and nothing more.   I have a home and there will be some IHT on it.  My brother will not be able to afford the IHT unless he sells and the insurance is in place for this purpose.   He would be the trustee and would use this payout to make that IHT payment.  So the monies are already spoken for - he himself would not benefit from any cash payment as the sum is already allocated       

Thanks for the clarification, although this sounds more like a standard life police written in trust rather than a gift trust. 

ET100

Thanks so much for your time Keep_Pedalling.   It is a standard life policy purely put into trust.  At the time of taking this out I had the option to put this in trust.  Although the paperwork says it is a gift trust - discretionary.  It states the gift trust is designed to allow payment of the plan proceeds to the trustees without the need for a grant of probate/letters of administration/confirmation