If you take out a life policy subject to an absolute trust , and the policy has no surrender value, then to ensure that payment of the premiums will not be a chargeable lifetime transfer, you should ensure that….
a) The premium is paid to the absolute beneficiaries
b) The premium is paid to the life company by you
c) The premium is paid to the trustees, and thence to the life office.
d) The premium is paid to the settlor
the correct answer is c.
If the settlor pays the premiums under an absolute trust for a protection policy the premiums may be treated as chargeable lifetime transfers if above £3k pa or not payable out of the normal expenditure out of income exemption..