Discussion
Having looked at all sorts of options (nil rate band discretionary trusts, AIM investment portfolios, family investment companies etc) I ended up concluding that the best option, at least at my age, was to insure against the liability. Term assurance, even for a relatively long time, eg 20 years, at my age (early 50s) is fairly cheap and it has the great advantage of being reversible and certain.
Everything else was vulnerable to changes in the tax regime which given the political and fiscal climate at the moment seemed very likely. The only alternative is to give stuff away and hope you live long enough to outlive the liability but my kids are too young for that. I'm still vaguely thinking about creating a separate share class in my company for the kids, thus turning it into a quasi family investment company, but havent got there yet.
It is entirely possible I'm missing something so interested in the views of others. I would, however, run a million miles from the shysters who are selling schemes to avoid IHT on the property of elderly relatives at risk of going into care homes.
Everything else was vulnerable to changes in the tax regime which given the political and fiscal climate at the moment seemed very likely. The only alternative is to give stuff away and hope you live long enough to outlive the liability but my kids are too young for that. I'm still vaguely thinking about creating a separate share class in my company for the kids, thus turning it into a quasi family investment company, but havent got there yet.
It is entirely possible I'm missing something so interested in the views of others. I would, however, run a million miles from the shysters who are selling schemes to avoid IHT on the property of elderly relatives at risk of going into care homes.
Ha, I've just sold my house so will be unskint until purchasing another. Then, when I do, I'll be skint again!
It's a nightmare trying to find information about it. No matter what you read, there's always another opinion or a snake oil option. Just want some solid, uncontroversial and independent advice really. Not sure who I can trust!
It's a nightmare trying to find information about it. No matter what you read, there's always another opinion or a snake oil option. Just want some solid, uncontroversial and independent advice really. Not sure who I can trust!
williaa68 said:
Having looked at all sorts of options (nil rate band discretionary trusts, AIM investment portfolios, family investment companies etc) I ended up concluding that the best option, at least at my age, was to insure against the liability. Term assurance, even for a relatively long time, eg 20 years, at my age (early 50s) is fairly cheap and it has the great advantage of being reversible and certain.
Reversible insurance?The first thing then is to work out what your liability may be. If, for example, you are sitting on £1m from your house purchase, are unmarried and have no other assets your IHT bill would be £270k (there's a good calculator here: https://www.which.co.uk/money/tax/tax-calculators/...
If you are 50 you could insure against that risk for ten years for about £250 a year. For 20 years about £350 a year, 30 years about £500.
If you are 50 you could insure against that risk for ten years for about £250 a year. For 20 years about £350 a year, 30 years about £500.
Simpo Two said:
Reversible insurance?
Apologies poor choice of language on my part. What I meant was if you went for some other strategy (eg you give away the assets or indeed spend them) then you can always just stop paying the premium - it isnt a complex structure like a trust where unwinding it has complications .williaa68 said:
Apologies poor choice of language on my part. What I meant was if you went for some other strategy (eg you give away the assets or indeed spend them) then you can always just stop paying the premium - it isnt a complex structure like a trust where unwinding it has complications .
Is this life insurance or an investment product? If the former I believe you've just wasted the premiums.My mother was sold an insurance policy by an IFA to cover a forecast IHT liability. But 10 years later, when it was called upon, the figures had changed so much there wasn't any liability. I suppose what it did do was move that sum from the Estate to outside it... I think... but when you consider that the money spent on premiums could have been invested, I think we about broke even. And the IFA sold a product.
Simpo Two said:
Is this life insurance or an investment product? If the former I believe you've just wasted the premiums.
My mother was sold an insurance policy by an IFA to cover a forecast IHT liability. But 10 years later, when it was called upon, the figures had changed so much there wasn't any liability. I suppose what it did do was move that sum from the Estate to outside it... I think... but when you consider that the money spent on premiums could have been invested, I think we about broke even. And the IFA sold a product.
That's the nature of insurance (or assurance). You pays your premiums...My mother was sold an insurance policy by an IFA to cover a forecast IHT liability. But 10 years later, when it was called upon, the figures had changed so much there wasn't any liability. I suppose what it did do was move that sum from the Estate to outside it... I think... but when you consider that the money spent on premiums could have been invested, I think we about broke even. And the IFA sold a product.
In Will's case the premiums may be advantageous if there is no IFA commission?
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