Calculating periodic tax charge for WOL in discretionary trust

I am hoping someone can help.
I am having trouble finding out how we would value a guaranteed whole of life policy which is held in a discretionary trust if the life assured is in poor health. Where they are in good health at the 10 year anniversary I understand that the value would be based on the premiums paid as the plan has no surrender value. Where they are in poor health I think the plan has a higher value. Is it the sum assured? The only guidance I have found is that the Trustees would need to discuss with HMRC and agree a value. Can anyone add to this? Many thanks, El


  • It is going to be a discounted value of the sum assured. What is the current sum assured?
    The level of discount is going to depend on what 'poor health' means.
    The value is what a willing buyer would pay for this policy - so taking into account the sum assured, the now likely life expectancy of the life assured and the level of premiums payable.
  • Thank you. That is helpful. At the moment we are looking at it in general terms to ensure we cover it appropriately as a risk in our recommendation reports. 
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