Inheritance Tax Planning
Morley and Scott financial planning managers have a thorough knowledge of inheritance tax mitigation techniques. They are also supported by a range of professionals able to provide further guidance on more complex situations.
Case Study: Inheritance Tax Planning
Our client’s are 55 and 58 years old and in good health. Their combined estate is valued at £2.5 million and they are keen to avoid inheritance tax. They have three children all in their twenties and concerned that the only advice they have been able to secure involves gifting assets or putting them in trust irrevocably. They are concerned about their own financial security and an added complication is that the assets they have are illiquid in the main a buy to let portfolio which provides them with income and they consider their pension.
After long discussion it was agreed that the most effective method to resolve our client’s concerns was to establish a joint life second death whole of life, life assurance policy with premiums guaranteed not to increase throughout life. The policy sum assured matched the current inheritance tax liability that would arise if our clients both died today. The policy was placed in trust to ensure that the policy proceeds when they become a death claim do not themselves create an additional inheritance tax liability. The cost of a policy with a death benefit sum assured of £772,000 was £990 per month and easily affordable. The policy proceeds payable when our client’s have died will be available to their children to fund inheritance tax and avoid the need for family heirlooms to be sold. If circumstances change in future our client’s may cease funding the policy.
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