Inheritance Planning

A Section 72 life insurance policy is a tax-efficient way to provide a lump sum to deal with inheritance tax liabilities. It's designed to cover any inheritance tax liability that may arise upon the death of the insured individual, ensuring that beneficiaries receive their intended inheritance without financial burden.

No, you don’t have to have this cover, however there are many reasons why you should consider it. Ultimately some or all of the assets you inherit may be illiquid, meaning you may not have the available funds to cover your inheritance tax liability without needing to sell some or all of the assets. You may have inherited a property that is close to your hear that you are not ready to sell, or you may not have sufficient time to sell an asset to realise the necessary funds to pay your tax liability. This is where a Section 72 policy provides the funds you need to pay your tax liability, meaning you can take more time to decide what you want to do with those sentimental assets that you have inherited.

 The cost of a Section 72 policy depends on various factors, including your age, health status, smoking status and coverage amount. Premiums are typically higher for older individuals and those with pre-existing health conditions.

This will be guided by the anticipated inheritance tax liability. We are not Tax Advisors, so it is important that you take professional advice to help establish how much your inheritance tax liability is likely to be. We can then provide a Section 72 policy to deal with that liability.

Once the policy meets certain criteria, the proceeds of the policy will be paid to the beneficiaries of your estate tax-free once used to offset an inheritance tax liability. Any amount paid out in excess of the tax liability may be subject to tax. Your Tax Advisor can advise you on this.