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Life insurance not to be hit by anti-trust rules

Date: Wed, 12 Apr 2006

The Treasury has confirmed that the majority of life insurance policies will not be affected by the recent anti-trust tax rules introduced in the Budget.

Insurance providers have welcomed the news and hope that this will ensure that people will continue to value the importance of life insurance policies. The industry had been concerned that around d4.5 million policies could have been hit by the changes.

A statement from HM Revenue & Customs said: "In particular, no-one who wrote a life insurance policy into trust before Budget day will have to pay an inheritance tax charge.

"This applies even where the policyholder continues to make payments after the Budget under the original terms of the policy."

However, life insurance policies that do increase above the current inheritance tax threshold (£285,000) will by charged at six per cent of the excess after a decade.


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