Any assets over the nil rate band (currently £300,000 for individuals or up to £600,000 for married couples and civil partnerships using the unused transferrable Nil Rate Band option) that are not in trust could be subject to IHT at 40%, the proceeds of which may have been immune from IHT if they had been held in a trust.
For example, take a married couple with £700,000 worth of assets, including a life insurance policy worth £400,000, which is not written in trust. On the first death, the assets would pass to the surviving spouse tax-free but on the second death, anything over £600,000 would be subject to IHT at 40% - the £100,000 above the threshold would be subject to a £40,000 IHT bill. However, if the policy had been written in trust, it is likely there would be nothing to pay.
Writing life polices in trust can be of considerable benefit to the person who is meant to benefit from the policy.
Writing life polices in trust can be of considerable benefit to the person who is meant to benefit from the policy.
For a free financial review and advice on this please contact The Will Centre on 01752 607040.
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