Aviva Life Insurance Policy

Arno55

Hi,

I have been dealing with the estate (less than £100k in total with no property to sell) of an elderly family friend. I have successfully applied for probate, successfully claimed & closed 2 life insurance policies from Sun Life, and closed & received his money from his bank accounts.

But having trouble claiming a small life insurance policy worth less than £3000 with Aviva, they are telling me this policy is held in trust for the beneficiary (my mum), however as far as we both are aware there is no trust set up. Aviva will not settle the claim until I can confirm the trust is HMRC exempt.

Can anyone please point me in the right direction for doing this?

thanks

poseidon1

For Aviva to be certain the policy is subject to some form if trust, it is likely the life company documentation would have been used in the first place.

One would have expected Aviva to have a copy of trust documentation since that would identify the policy trustees they are legally obliged to make payment to. Therefore, can Aviva provide a copy of the the trust document, any subsequent deed of assignment of the policy into the trust and identify the trustees concerned?

As for the question whether the trust is HMRC 'exempt', exempt from what exactly? If they are referring to the general requirement for trusts to be registered on the trust register, there is a general exemption for policy trusts as set out below -

https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm23030#:~:text=Trusts%20holding%20life%20insurance%20policies,provided%20to%20the%20person%20assured.

Therefore more clarity required as to the nature of the HMRC exemption Aviva believe they require confirmation.

Arno55

https://forums.moneysavingexpert.com/discussion/comment/81865621#Comment_81865621

thanks for the reply 👍

They say the trustee/beneficiary is my mum, the exemption relates to the trust being registered with HMRC. I will contact them for copies of any documentation relating to the trust.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81865632#Comment_81865632

As to whether the policy trust needed to be recorded on HMRC's register, was the policy a regular monthly/yearly premium with proceeds payable on death, or a single premium investment bond that could have been partially or wholly surrendered at any time?

If the latter, the trust was not exempt from registration. If so, for some reason Aviva seem to be saying they will not settle the claim unless/until the trust is registered.

Arno55

https://forums.moneysavingexpert.com/discussion/comment/81866183#Comment_81866183

it was a monthy premium with proceeds payable on death.

Reading the link you attached, is Sch3A(4) the exemption I should quote?

Thanks

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81866221#Comment_81866221

Yes that would be the appropriate legislation, although I would have assumed Aviva's technical support would be fully aware of this. In any event, see if this progresses them meeting the claim.

Arno55

https://forums.moneysavingexpert.com/discussion/comment/81866286#Comment_81866286

thanks for your help, I will update on how I get on.

Arno55

@poseidon1 Aviva have finally paid out today, thank you for your advice on this 👍