― 475 ―
XI. Insurance and Superannuation
24.A96. In the Committee's view, proceeds of life insurance policies and premiums paid in respect of such policies, under an integrated estate and gift duty, should be treated as follows:
- (a) Where the deceased owned the policy on his life at the time of death, the whole of any proceeds should be taxed as part of his estate on his death, irrespective of who paid the premiums during his life.
- (b) Where the policy was not owned by the deceased at the time of his death, the proceeds should not form part of his estate even though the deceased may have paid some or all of the premiums during his life.
- (c) Premiums paid on a policy owned by another person should be treated as gifts and taxed accordingly.
24.A97. The Committee, in paragraph 24.37, rejects any concession for specific assets and in so doing rejects any general concessional treatment of superannuation benefits in relation to estate duty. A lump sum received by a beneficiary on the death of a member of a superannuation scheme should not be treated differently from a lump sum received by a member on retirement which forms part of his estate on death.
24.A98. There may, however, be justification for according special treatment to an annuity or a pension that becomes payable to one spouse on the death of another, whether under a life policy or a superannuation scheme. To tax the actuarial value of the annuity or pension may present liquidity problems and it is relevant that the annuity payments will be subject to income tax in the hands of the surviving spouse. The matter has already been considered in Chapter 21.