If a minor is a beneficiary of an insurance policy on death, will any income derived from that payment by a minor be considered as "excepted income".
To be more detailed it would be a Challenger Care Plus Lifetime policy which is effectively a combined annuity and insurance policy
Yes. Excepted income.
Yes. Excepted income.
Thanks Taxduck. Very quick answer.
I had already seen that reference. What made me unsure however is that the insurance payment, technically, will not come directly from the estate trustee. Instead, it comes directly from the insurance company once probate is granted.
Do you think this might need further clarification?
Similar to this I would suggest: (from excepted income)
Income that is not excepted income is generally income from bank interest, dividends from shares and distributions from family trusts. Usually income provided by parents to minors. Reason is so parents are not able to use (abuse) their children or children's bank accounts to avoid paying tax.
Always a good idea to check with a tax professional. Advice on this forum is not guaranteed to be accurate.
Thanks again Taxduck.
Yeah I'm pretty sure it is probably exempted income, but as you say will check it with a tax professional to be sure.
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