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Where Taxpayers and Advisers Meet

Life Insurance & Chargeable Event

AdamSf
Posts:2
Joined:Mon Apr 18, 2022 6:09 am
Life Insurance & Chargeable Event

Postby AdamSf » Mon Apr 18, 2022 6:36 am

Hi,

I was LPA and now Executor of a deceased relatives will.
They have no direct descendents and were widowed over twenty years ago.

I advised The Life Insurance of their death and they have subsequently sent me a Chargeable Event Certificate which details cash in value, amount of gain and also a notional tax figure.

Have been advised it should be disclosed to HMRC on the next tax return. They further advise " the policy is treated as having borne basic rate income tax, however this is notional tax which is not repayable even if you pay no tax or pay tax only at the basic rate"

The deceased was retired and paid basic rate tax on state and private pension. In due course I need apply for probate so how do I treat this? Will the amount paid as Life Insurance be subject to tax twice as I am sure I have to include the full payout on the IHT400 form (as IHT will need to be paid).

Quite confused.

My gratitude and appreciation to anybody that can help.

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Life Insurance & Chargeable Event

Postby AGoodman » Tue Apr 19, 2022 12:33 pm

Was the policy written in trust at all? If there is nothing in the papers, the insurer itself may know.

If so, it is likely outside of the estate (assuming the deceased was not a beneficiary of the trust).

If there was no trust, the payout will be an asset of the estate - Box 57 of IHT400 and IHT410

Can't help you on the CGT/IT side I'm afraid but doubt there are additional taxes (I may be wrong!).

AdamSf
Posts:2
Joined:Mon Apr 18, 2022 6:09 am

Re: Life Insurance & Chargeable Event

Postby AdamSf » Tue Apr 19, 2022 2:03 pm

Hi,

No it's not in trust - Will have a look at IHT410

Many thanks for your reply.


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