This document discusses how to make life insurance tax efficient by placing policies in a trust, which exempts them from inheritance tax (IHT) and allows proceeds to bypass the estate for tax calculations. It explains the benefits of setting up a trust, including quicker payments to beneficiaries and recommendations to consult a financial adviser for assistance. The document emphasizes the significant potential savings on IHT and encourages contacting experts for further advice.

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How To Make Your Insurance Tax
Efficient — Financial Advice
When it comes to planning your family’s financial future, it makes good sense to take every
possible step to protect their standard of living. So if you’ve gone to all of the effort of putting the
right policies in place, it would be a real shame if a sizable proportion ended up in the tax man’s
pockets.
But this is unfortunately what often happens, with more than half a billion pounds every year
being paid in inheritance tax (IHT) from life insurance policies.
One solution you could consider to make sure this doesn’t happen, is putting your policy into a
trust. Taking out life insurance within a trust makes the policy exempt from IHT if you die as it
places it outside of your estate.
What is a trust?
Under normal circumstances, the pay-out from a life insurance policy would form part of your
legal estate, and may therefore be subject to inheritance tax. The threshold per individual for
inheritance tax in the UK is £325,000. Tax is payable at 40% on any part of an estate above this
level.

2. A trust allows you to set aside an asset (in this case the policy) to benefit a specified person or
people (the beneficiaries). The asset is managed by a trustee or trustees until such time as the
beneficiary is intended to benefit.
By writing a life-insurance policy in trust, the proceeds from the policy can be paid directly to the
beneficiaries rather than to your legal estate, and will therefore not be taken into account when
inheritance tax is calculated. This means the value of your estate may not move above the
threshold, depending on your circumstances.
Writing a policy in trust also means payment to your beneficiaries will probably be quicker, as the
money will not go through probate. This is a legal process which confirms an executor’s authority
to deal with your possessions.
Does it cost extra?
No, it shouldn’t do. Your insurance provider should be able to provide you with this option for free
when taking out the policy. Some existing life policies can also be transferred into trust.

3. In the first instance, seek the advice of an independent financial adviser. Quantum Advisers
offers expert independent advice across a range of financial products and services and could save
you £££s.
To get a full analysis of your needs and ensure you have the best all round protection for you, your
loved ones and your business, contact us today on 020 7562 5771 for a free consultation.
Next time — When should you review your policies?
More Information at
Mail: info@credius.com
Call: +44-020-7562-5858