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bigduckontax
bigduckontax, Accountant
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I have a life ins policy in my name but trust set up by ins

Customer Question

I have a life ins policy in my name but trust set up by ins co so no tax to be paid to be paid to my wifr. I was under the impression that the trustees could pay total amount into my estate for my wife tax free. I have now been told that this is not so because as she draws money from the trust tax wil be taken on that amount is this correct
Submitted: 3 months ago.
Category: Tax
Expert:  bigduckontax replied 3 months ago.

Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.

Customer: replied 3 months ago.
do you want me to relight again
Expert:  bigduckontax replied 3 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

The moneys drawn from the trust will be income in her hands, aggregated with any other income and subject to Income Tax (IT). She will, of course, as a citizen of the EEA, be entitled to the normal personal allowance, currently 11K to offset this income.

I do hope that you find my reply of assistance.

Customer: replied 3 months ago.
is there a way of avoiding this what if there is no trust would the ins co deduct tax at pay out
Expert:  bigduckontax replied 3 months ago.

It would have been better had you just given her the money direct as inter spousal transfers are outside the scope of UK taxation.

Customer: replied 3 months ago.
ok thanks
Expert:  bigduckontax replied 3 months ago.

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