Saving IHT with Life Insurance Policies

15th November 2006   

A recent report by Standard Life indicates that: - "22% of advisers place less than 10% of their life protection business in Trust. Another 60% of advisers place less than half of their protection business in Trust, and only 10% of advisers confirmed they place nearly all of their protection business in Trust".   

The use of an appropriate Trust in conjunction with a life insurance policy is absolutely crucial in saving Inheritance Tax and for this reason the statistics set out by Standard Life are worrying because they indicate that a large number of professional advisers may not be giving appropriate IHT saving advice to their clients.   

Despite the changes to the taxation of Trusts in the Finance Act 2006, if a life insurance policy is placed in the right type of Trust then the whole of the proceeds can fall outside the taxable estate of the person who has died.   

As this can save up to £40,000 of tax in respect of every £100,000 insured the savings potential is evidently huge.

As part of the review of all our client's affairs, we will always check the status of their life insurance policies and whether or not they are placed in some form of Trust and now are certainly not the time to stop.

We are expert Inheritance Tax Solicitors in Bournemouth with solutions to all your Inheritance Tax problems. Simply contact  us today on 01202 802 807.