Easy Inheritance Tax Planning

IHT planning for those who don’t want to change their lives. For all who believe that they will have an IHT liability on their death or that of their spouse or civil partner.

The Solution:

A  life assurance policy – single life or joint lives last survivor (as appropriate) in trust for those who will inherit.  This will provide tax free funds to meet the liability and preserve the value of the estate – undiminished by tax – for the beneficiaries.

The Message:

Inheritance tax (IHT) will not damage your wealth but it could seriously damage that of your family.

Effective IHT planning usually involves you giving away or giving up something.  There are some very effective solutions you could consider based on relevant investments and trusts.   But it will involve you giving something up in relation to the assets or investable capital you carry out IHT planning with ie.

  • absolute control

or

  • your unconstrained right to income

or

  • your unconstrained right to access the full value of the capital

If any or all of these consequences are unacceptable to you BUT you are still concerned about IHT then the answer for you (subject to health and cost) may be to effect an appropriate life assurance policy held in trust for those who will eventually inherit your estate.

If you are married or in a civil partnership and the first of you to die will leave your assets to the other on death, these will be exempt. In relation to the eventual liability on the death of the survivor this should be covered by a policy which pays benefits on the death of the second of you and your spouse/civil partner to die.

The premiums will usually be exempt and the sum assured IHT free and paid without waiting for probate.

Duncan R Glassey
Senior Partner – Wealthflow LLP

duncan.glassey@wealthflow.com

This article is distributed for educational purposes and should not be considered investment advice or an offer of any product for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. Past performance is not indicative of future results and no representation is made that the stated results will be replicated. Errors and omissions excepted.