Put your trust in life insurance and put your life insurance in trust

What is the problem?

If your life insurance isn't in trust the payout will form part of your estate on your death and will be subject to Inheritance Tax. 

The nil rate band is free of Inheritance Tax, but the rest of your estate will be pay 40% tax.

What is the answer?Three orphaned children walking over a stone bridge going to a building that says Insurance Company. One of them says "Mummy and Daddy left money for us in a life insurance policy. It'll be enough to look after us until we are grown up." There is a troll hiding behind a rock with the words Tax Man on his hat. He says "They've got a big shock coming - I'll have almost half of it because it wasn't in trust!"

We believe that unless there is a good reason not to (and there rarely is), all life insurance should be in a trust.

It is vital the trust is set up properly, otherwise, the proceeds of your policy may still be liable to 40% tax. 

BNI logoMember of BNI Wrexham
David Jones is the principal of North Wales Independent Advice, an appointed representative of TenetConnect Services Ltd, which is authorised and regulated by The Financial Services Authority.
TenetConnect Services Ltd is entered on the FSA Register under reference 150643. North Wales Independent Advice, 5 Warrenwood Road, Wrexham. LL12 7RN