Sumary of Why you must ‘reflect’ on life insurance to fund IHT bill:
- The Inheritance Tax issue was raised on the Money to the Masses podcast, where Harvey Kambo said: “For people that are reaching the later stages of life, IHT becomes a topic of interest to them.
- In situations where your estate could be liable for Inheritance Tax, some people will choose to put in place life insurance and put that in a trust so that it’s available to their beneficiaries and can fund the tax that would be payable upon their death.
- ”Ms Kambo continued: “Now there are a number of reasons why you should reflect on life insurance that you’ve put in place for IHT.
- “But you may have also made some gifts during your lifetime which become potentially exempt from tax and are only liable for tax for period of time.
- “And obviously life insurance in not the only way to address your Inheritance Tax liability that may be applicable to your estate.
- DON’T MISSCarefully planned lifetime gifting can be a useful tool to reduce Inheritance Tax (IHT) after retirement.
- He said: “Many people buy life insurance without advice, so aren’t aware that if they don’t put the policy in trust it’s included in their estate and could end up being taxed at 40 percent.
- Putting life insurance policies into trust is relatively straightforward.