Policies in post-21 March 2006 trusts

Life assurance policies that are put in trust after 21 March 2006 will be taxed in the same way as other trusts. But special rules apply to trusts of life policies established before 22 March 2006.

Policies in pre-22 March 2006 trusts – premium payments

FA 2006 provides transitional relief for trusts of life assurance policies created prior to 22 March 2006 where premiums paid before 22 March were PETs and those paid after 21 March 2006 would otherwise fall within the new provisions. Typically this would be the case where the policy is subject to a ‘flexible’ interest in possession trust.

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