taxation of uk life assurance policy

[bill on line]

I have my inland revenue guide to trusts IR152

Which states there are basicaly 5 categories of trust and the taxation of them differs.

Now an unqualifying uk life assurance policy already pays income and capital gains tax, at the rate applicable to life offices.

My question is there any extra tax due if the life policy is put into trust?

Is tax determined by type trust discretionary trust, accumilation and maintanance trust or intrest in possessions trust. Or are life poliucies exempt from any more tax if the deed if a standard one prepared by the insurance company, as i have read some where they can be?

I would like to understand more about the taxation of life policies written in to trust income, capital and IHT and not sure were to look.

[Ian McTernan CTA]

Typically the easiest way to do a life policy is to have the life company write it in trust so that the proceeds fall outside of your estate, then you have no further worries on the subject.

Most life companies can arrange this.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com

[bill on line]

Ian thank you for your reply, I presume the life company would probably only provide trusts that prevent extra tax needing to be payed (greater than tax on uk life funds)

However if uk life assurance policy was placed in a discretionary trust according to IR152 income tax in this trust is at the rate 34%, how can this be met by the 20% tax on life funds?

Also i have a trust deed prepared by Standard life called a Flexiable trust england and wales single settlor.

My question is what type of basic category of trust is this Flexiable Trust how can i determine if it is a bare/absolute discretionary, intrest in possesions or accumalation and maintenance if it is not stated explecitedly on the deeds?