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Inheritance Tax Solutions - Life Cover Arrangement for IHT Planning

Life Cover Arrangement for IHT Planning

How can I create a fund to pay my estate’s IHT bill for my beneficiaries and also reduce the estate value for IHT purposes?

Client Circumstances

  • Mr and Mrs Jukes are both Aged 65
  • Both in good health
  • Both non smokers
  • Estate value exceeds IHT free amount by £150,000
  • Main beneficiaries - 3 children
  • Do not want to make any gifts
  • Wish to keep things simple
  • Have surplus income
  • If Mr and Mrs Jukes do nothing their IHT bill will be £60,000

Recommended Solutions

  • Joint life last survivor whole of life policy
  • Written in Trust for 3 children
  • Sum Assured of £60,000
  • Premium of £72.20 pm guaranteed for life (source IRESS Quote System February 2016)

Benefits from advice given

  • Creates a fund that will pay part or all of the Inheritance Tax liability
  • Simple to set up
  • Policy proceeds will not be subject to IHT
  • Payment of premium covered by the exemption for normal expenditure out of income
  • Premium guaranteed not to increase

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Future Servicing

We will look to carry out a regular review of your circumstances, objectives, needs and portfolio performance to ensure all arrangements continue to be suitable and advise of any changes that may be appropriate.

This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.

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