Inheritance
Tax
Reduction
Inheritance tax would potentially cost family members hundreds of thousands of the well-earnt cash. However, ln recent times we have found there is a way around this so you can reduce the amount of inheritance tax to be paid, with a life insurance policy. A life insurance policy can cover the cost of the amount which would be owed in inheritance tax. The sum to be covered can be worked out on our inheritance tax calculator.
Plans that are set up to pay into a trust do not form part of the deceased’s estate and should, therefore, be exempt from inheritance tax.
An added benefit is that policies left in the trust will pay out a lot quicker than going through the probate process, with the sum being handed over in a matter of weeks, rather than months.
An alternative to a whole of life policy is to give away part of your estate before you die.
However, if you die within seven years of the gift, there could still be an inheritance tax liability as most gifts are classed as ‘potentially exempt transfers’ (PETs) for the seven years. As the tax due on a PET reduces over the seven-year period this makes a seven-year decreasing term policy a sensible and low-cost way to cover the potential inheritance tax liability.
This is the tax paid on assets left when someone dies. The main question asked is, how much will be taken for this? We have the answer. 40% of the amount of estate you have remaining over the threshold (£325,000). To see how much you would have to pay for inheritance tax, we have created a calculator to work out how much you will be paying.
Inheritance tax would potentially cost family members hundreds of thousands of the well-earnt cash. However, ln recent times we have found there is a way around this so you can reduce the amount of inheritance tax to be paid, with a life insurance policy. A life insurance policy can cover the cost of the amount which would be owed in inheritance tax. The sum to be covered can be worked out on our inheritance tax calculator.
Plans that are set up to pay into a trust do not form part of the deceased’s estate and should, therefore, be exempt from inheritance tax.
An added benefit is that policies left in the trust will pay out a lot quicker than going through the probate process, with the sum being handed over in a matter of weeks, rather than months.
An alternative to a whole of life policy is to give away part of your estate before you die.
However, if you die within seven years of the gift, there could still be an inheritance tax liability as most gifts are classed as ‘potentially exempt transfers’ (PETs) for the seven years. As the tax due on a PET reduces over the seven-year period this makes a seven-year decreasing term policy a sensible and low-cost way to cover the potential inheritance tax liability.