IHT and joint life first death insurance policy

Is IHT payable if both insured people die within 30 days?

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 A joint life first death insurance policy is being placed into a discretionary trust and the paperwork warns that for 'those married or in civil partnerships there may be an IHT charge if both insured people die within 30 days of each other' and 'we strongly recommend you take professional advice about the IHT treatment'.  I am struggling to understand the point of the trust if that is the case.  As a married couple leaving everything to each other in the first instance, without the trust, there would be no IHT on the first death and then IHT payable by estate on the second death.  If IHT is payable on the second death as a result of the life insurance in trust, what is the point of the trust?  I am not an IHT expert and helping a family member rather than advising a client.  My relative will pay for professional advice if it is needed but we are wondering if this is a general disclaimer rather than a specific risk of placing the policy in trust.

Many thanks for your thoughts

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By crus
05th Jan 2024 15:39

It is not uncommon for a will to have a non-survivorship clause, i.e I leave everything to my spouse if they survive me by 30 days otherwise to.... ; in which case there's no IHT exempt spousal transfer.

I'd guess they are referring to that when they say there may be an IHT effect.

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