Using Life Assurance to Mitigate Inheritance Tax
|
|
- Arthur Cobb
- 8 years ago
- Views:
Transcription
1 T e T c e h c n h n i i c a l l B B r i r e i f e i n f g i n g Using Life Assurance to Mitigate Inheritance Tax Most of us use insurance policies in a variety of ways, to protect ourselves against the financial implications of loss of different kinds. Typical examples are insurance against damage to our homes (eg by fire or storm), against personal possessions (theft or destruction) or policies of a more personal nature (for example, the curiously named permanent health insurance to guard against having to retire from work before the anticipated retirement age because of ill health; medical insurance to pay for the cost of private health care; critical illness insurance and long-term care insurance). In one sense life assurance (the traditional name for life insurance) stands in a class of its own: after all, life is priceless and, once it has gone, it is gone. However, it may well make financial sense to make provision against the cost of unexpected death to the family. So, how can life assurance be put in place in a tax-efficient way? Setting the scene Assuming that an individual s estate exceeds the current nil-rate band of 325,000 (or 650,000 as between a married couple/civil partnership) there will be an Inheritance Tax (IHT) liability, typically on the second death. Given the exemption on the first death for property passing to a surviving spouse/civil partner, Wills should be drawn so that no more than the available nil-rate band of value goes to other members of the family at that point. And indeed, under the transferable nil-rate band, any percentage of the nil-rate band unused on the first death can be carried forward for use on the second. In the rare case where the first to die is UK domiciled for IHT purposes, but the survivor is not, there is a historic limitation of the exemption to just 55,000, though a consultation this Summer might see an increase from 2013 to (perhaps) the nil-rate band albeit no more. It makes sense to keep an ongoing watching brief on how cash to meet the IHT bill might be generated, in particular to avoid the forced sale of assets such as land or buildings or even personal chattels. Of course it may well be that when the time arrives there are available cash or stock exchange securities to fund the IHT liability, which is generally due at the end of the month following the six months after death, though very rarely will all the tax be paid at that point - and interest accrues at (currently) 3% on unpaid IHT. The suggestion in this Bulletin therefore is that you might like to consider the use of life assurance to meet at least a part of the prospective IHT liability on death. What one might call the investment rationale for such a proposal is that, through the payment of regular premiums, sums are being extracted from the chargeable estate in order to provide an IHT-free pot outside that estate which can be used to help meet the IHT bill. The policy proceeds arise outside the estate because they are (or,
2 at least, should be) written in trust, whether on a discretionary trust or specifically for the benefit of those on whom the IHT liability will fall. One practical advantage of doing this is that the life company will pay out the proceeds on production of a death certificate, which makes it easy to meet the six months timetable for paying the IHT. By contrast, although banks and building societies are now prepared to release funds from the deceased s accounts specifically to pay IHT before probate has been granted, the traditional problem with accessing assets owned by the deceased for this purpose is that a grant of probate must first be obtained. Probate is the authority of the Court to the executors to deal with the estate and it can take nearly up to the deadline of twelve months after the end of the month of death to submit a return of the chargeable estate to Her Majesty s Revenue & Customs (HMRC) Trusts and Estates on form IHT 400, only after which will the grant be issued. Qualifying and Non-Qualifying Policies This is the fundamental distinction for tax purposes. Proceeds arising from qualifying policies are generally free of all tax. While Capital Gains Tax (CGT) is not payable on death, there could be a lifetime disposal on for example of surrender of rights under a policy. Such a disposal will not produce a chargeable gain for CGT purposes, except where the policy is second hand. Accordingly, if A buys the rights under a policy on B s life, a chargeable gain may arise to A when B dies. Further, the maturity of a qualifying policy does not generally trigger any Income Tax liability (although exceptionally the early surrender of a UK Whole of Life Policy can trigger a liability to up to 30% Income Tax or 50% if a non-uk policy), whereas a nonqualifying policy can well give rise to Income Tax. Broadly speaking, qualifying policies will include: (a) Whole of Life Policies, whether on single or on joint lives; (b) Term Assurance Policies, perhaps taken out to protect against the IHT implications of death within seven years after a potentially exempt transfer to an individual for IHT purposes, when survival for that period will make the gift exempt; or (c) the traditional Endowment Policy for a term of at least 10 years, where the policy will mature on the earlier of survival to a specified date (perhaps 20 years hence) and prior death. Non-qualifying policies have more of an investment than a life assurance content and mainly comprise: (i) (ii) Single Premium Bonds; and certain Unit-Linked Whole of Life Policies. A wide array of choice Perhaps the simplest form of policy is one where an individual takes out a policy on her life, paying annual premiums until she dies, and writes the policy in trust for her son who following his mother s death receives a lump sum on payment on the production of the death certificate. The longer the policy remains in force, the larger the amount which builds up, whether under a With Profits Policy or a Unit-Linked Policy. With Profits Policies were the traditional, though now less common, form, with annual reversionary bonuses declared each year, followed by a terminal bonus on maturity. Unit-Linked Policies carry a greater risk, though also a greater potential for growth, where the policyholder selects investment funds in which the annual premiums are invested (less charges). Within that broad description various options can be built in, for example depending upon financial circumstances to continue paying annual premiums of a regular amount of up to say age 65 and then make the policy paid up.
3 Term Assurance provides comfort that, if death follows within a certain number of years, a cash sum will be paid to meet particular needs not just for payment of IHT, but perhaps also the cost of educating the children or maintaining the family where the main source of income has gone. The thinking behind Endowment Assurance combines features of both Whole of Life and Term Assurance, with premiums invested as with Whole of Life Policies. While the traditional use of such policies was to pay off a mortgage on a private residence, performance of the Endowment has for many years now failed to match up to expectations on maturity, producing a shortfall on the sum required to pay off the mortgage which has to be found from other sources. Non-Qualifying Life Policies Because it has the characteristic of investment, a non-qualifying policy is taxed on a chargeable event. Gains made can attract a charge to the higher or additional rates of Income Tax (an extra 20% or 30% respectively), on the assumption that with a UK policy the equivalent of 20% basic rate has been charged to the life company already. This Briefing assumes that the policy has been issued by a UK company: with a non-uk policy, basic rate Income Tax also is charged. While a chargeable event will arise on a variety of occasions, typically this will be the partial or complete surrender of a right under the policy or the contract, the sale of those rights, a death which produces benefits or the simple maturity of a Life Policy or a Capital Redemption Policy. One particular feature of non-qualifying policies is the ability for the policyholder to take withdrawals of up to 5% per annum of the original lump sum premium. We should emphasise that these withdrawals are not tax-free, but rather tax deferred, because they will be taken into account on final maturity of the policy, possibly (though not necessarily) after the expiry of 20 years (20 x 5% = 100%). If in any policy year the total withdrawn exceeds the cumulative 5% annual allowances, there will then be a chargeable event and, if over 20 years, annual 5% withdrawals have been taken, there will be a chargeable event at that point. So-called top-slicing relief is available on any chargeable event. This works by dividing the gain by the number of years over which the policy has been in force and adding the resulting amount to taxable income for the year. Suppose the policy has been in force for ten years and the gain is 100,000; the rate of tax on the 100,000 is found by seeing what the rate of tax is on 10,000 by adding it to the taxable income, whether that produces (in 2012/13) a rate of 20%, 40% or 50% - or somewhere in-between, where the rate bands are straddled. IHT mitigation One advantage offered by a non-qualifying rather than a qualifying policy is the case where some benefit is or might be needed from the policy value during the lifetime. It is obviously simplest if not. If so, however, the immediate problem might seem to be the reservation of benefit (GWR) rules with IHT. That is, in broad terms, a gift will not be effective if either an actual benefit or the possibility of benefit is retained by the donor. Furthermore, in cases where GWR does not apply but there is still a benefit, there could be a liability under the Pre-Owned Asset (POA) Income Tax regime introduced in 2005/06, which applies an annual Income Tax charge on the benefit retained in certain circumstances. Happily, however, with the following types of IHT mitigation arrangement involving non-qualifying policies, HMRC have confirmed that neither GWR nor POA applies and we proceed to outline how these work. Gift and Loan Plans An individual makes a trust with say 100 for the benefit of his family (excluding his spouse/civil partner and himself). He then lends a sum of money, say 250,000, to the trustees which he can demand back at any time. The trustees use the cash to take out a bond, typically on the lives of the children. The anticipation is that the individual will want the benefit of the annual withdrawals of up to 5%, so the trustees
4 might ensure that the bond is divided into 20 (or more) segments, one (or more) of which will be surrendered each year to repay the loan. Given that the annual withdrawals do not exceed the 5% allowances, any higher or additional rate Income Tax liability will be deferred until the earlier of the withdrawal of 100% of the bond and some other chargeable event. Any tax liability at that point may be relieved by top-slicing relief. Any loan outstanding when the individual dies will form part of his chargeable estate. However, increases in value in the bond meanwhile will arise for the benefit of his family outside the estate. So, the longer that the taxpayer survives, the better although the only gift that has been made is the 100 or so (typically exempt) with which the trust was created in the first place. Usually the 5% withdrawals will simply be spent as income. There are no immediate IHT implications, because there is a loan rather than a gift at outset. Discounted Gift Schemes (DGS) These do involve a gift for IHT purposes at outset. The individual will put cash into a trust of such a value (see below) that he does not exceed his nil-rate band of 325,000 (for 2012/13), so avoiding an IHT liability of 20% on the excess. The trustees will invest the cash in one or more bonds, again typically on the lives of the children. Within each bond there are two sets of rights, under a retained fund and a settled fund, respectively. The retained fund is held for the settlor absolutely and it is these rights which will fund the annual withdrawals of up to 5%, again typically found through encashing one or more discrete segments. Under the settled fund (from which the settlor and spouse/civil partner are excluded from benefit) the value increases outside the estate. The IHT magic of the arrangement is that, given the existence of the retained fund, the actual value which can be put into the DGS without exceeding the nil-rate band is rather more than 325,000. How much more will depend upon the life and health of the settlor. The uplift, however, can be quite significant. Let us suppose that in a particular case the amount invested is 800,000, so that the retained fund is 475,000 and the settled fund 325,000. The retained fund will be used to make the annual payments to the settlor: to the extent that he does not spend the payments, they (plus any interim growth) will form part of his chargeable estate on death, but otherwise the settled fund is extinguished at that point. The planned withdrawals under the DGS will tend to be tailor-made to the life expectancy of the settlor, so that by the time of his death he would not have withdrawn 100% of the initial amount invested and, by writing the life assurance on the lives of say the children, the chargeable event is postponed until after the settlor s death. At that point the settled fund can be assigned to the beneficiaries absolutely, so that the Income Tax liability on the taxable gains arising on subsequent encashment of the policies can be spread across a number of individuals and indeed mitigated through top-slicing relief. There is one further point: being a formal trust, there is the potential for the tenyearly and exit IHT charges on the settled fund to the extent that they exceed the nilrate band at successive ten-year anniversaries and IHT might have to be paid at that point. Generally speaking, the Courts have confirmed in two recent cases (Bower and Watkins) that a DGS is not effective where the settlor is aged 90 or over at the time. The flexible reversionary trust (FRT) An individual takes out a series of ten single premium endowment policies, each one having a term ranging from one to ten years. He gives all the rights under the policies to a trust from which settlor and spouse/civil partner are excluded from benefit. Again, the settlor will not want the total value settled to exceed the available
5 nil-rate band, which will not be more than 325,000 for 2012/13. The proceeds of each policy on maturity belong to the settlor. However, the trustees have power to prevent that happening, for example by appointing the capital of the policy to the children or indeed the trustees have power to extend the maturity date of any particular policy. Because the trustees effectively have the power to prevent the settlor from recovering any capital under the policies, even should he survive to the maturity date, there is no discount up-front as there is with the DGS. On the other hand there are not further transfers of value for IHT purposes when a policy matures, whether the proceeds are payable to the settlor or for example to the children or indeed on the postponement of a maturity date. The FRT is therefore more flexible than the DGS, in terms of the ability to vary what the settlor may get, which unlike the DGS will include any investment growth. While the DGS can produce IHT savings even where the settlor survives for less than seven years, the FRT should be considered only where the settlor is likely to live for at least seven years. The potential problem with the FRT is a trust rather than a tax one. In an ideal world everyone will be speaking to each other, in the form of the older generation, the younger generation (as beneficiaries of the trust) and the trustees. However, the trustees need to consider whether a failure to exercise their powers, either to appoint to the children or to extend the maturity dates, is failing to maximise the benefit of a trust fund for the beneficiaries who do not of course include the settlor and spouse/civil partner. That is, there could be a conflict between the settlor s IHT mitigation objectives in creating the FRT in the first place (in being able to have his cake and eat it ) and the responsibilities of the trustees towards the beneficiaries. Life assurance for partnerships This is a very substantial subject which can receive only brief mention here. It needs to be addressed where one or both of the older generation is a partner in a business or perhaps owns shares in a family company either of which might have significant value. In general terms the partner/shareholder will want the value of the capital account/shares to pass to the family, while the continuing partners/shareholders will want to share between themselves the interest in the partnership/shares. A separate question is whether the partnership interest or shares secure business property relief from IHT at 100%, which will be the case if it is a trading partnership but not in broad terms if the business is of an investment character. Typically the interest in the business or shares would under the Will go to the family. Each of the partners/shareholders would take out a policy on their own life, writing the benefits in trust for the surviving partners/shareholders (or, generally less satisfactorily, each partner would take out a policy on the lives of the other partners). The idea would be to produce funds on death whereby the family of the deceased could be bought out at market value. A variety of tax issues arise under such arrangements, including GWR and POA issues, which HMRC accept are avoided if the beneficiaries under the trust are restricted to surviving partners/shareholders, with the power to bring in new partners/shareholders within the class of beneficiaries. The setting up and maintenance of such arrangements (with careful regular review) should be seen as an essential part of the governance arrangements of small family businesses.
6 Conclusions We should emphasise that the above is a very bare summary of the subject. Anyone who is concerned about the potential impact of IHT on their estate should seriously consider whether some form of life assurance can play its part in helping to produce the funds necessary to pay the tax. The rationale for this is as suggested above. Meanwhile, you may like to consider: what is the chargeable value of your estate and, if married or in a civil partnership, the joint estates; what roughly is the IHT which is going to be payable on, we assume, the second death, depending on the terms of the Will of the first to die; where the funds are going to come from, if not obviously from ready cash or investments; whether some form of life assurance cover might be appropriate; whether the benefit of any existing policies have been written in trust; whether a conventional Whole of Life Policy might, subject to its terms, be an appropriate measure; or if there is a cash sum available for IHT mitigation, but some ongoing benefit is required, whether any of a Gift and Loan Arrangement, a Discounted Gift Scheme or even a Flexible Reversionary Trust might fit the bill. For further information please contact Danny Clifford on or danny.clifford@ensors.co.uk This information is given by way of general guidance only, and no action should be taken solely on the basis of the information contained herein. No liability is accepted by the firm for any actions taken without seeking appropriate professional advice.
INHERITANCE TAX PLANNING. Sharing assets. Wills. Potentially exempt transfers (PETs)
INHERITANCE TAX PLANNING Substantial amounts of tax could be payable on the estates of individuals who do not plan for inheritance tax (IHT). The first 325,000 for 2014/15 is taxed at a nil-rate, but the
More informationIt is important to develop a long-term strategy for IHT planning using all the reliefs and exemptions that are suitable.
Introduction Substantial amounts of tax could be payable on the estates of individuals who do not plan for inheritance tax (IHT). The first 325,000 for 2012/13 is taxed at a nil-rate, but the balance of
More informationDiscounted Gift Trust. Guide for financial advisers
Discounted Gift Trust Guide for financial advisers Introduction Usually, where an individual gifts an asset into a trust and subsequently they continue to retain access or obtain a benefit from it, it
More informationIntermediary guide to trusts
Intermediary guide to trusts Important: The information in this guide is based on our understanding of current United Kingdom law and HM Revenue & Customs practice, which is subject to change. We cannot
More informationGains on foreign life insurance policies
Helpsheet 321 Tax year 6 April 2013 to 5 April 2014 Gains on foreign life insurance policies A Contacts Introduction Page 2 Part 1 Types of policy Page 3 What sort of policy do you have? Page 3 When will
More informationA Guide to the Discounted Gift Trust
A Guide to the Discounted Gift Trust > Contents Inheritance tax planning 04 What can the Discounted Gift Trust do for you? 05 Choice of trusts and inheritance tax 06 How does the trust work? 07 Income
More informationPassing on the Family Business : Inheritance Tax and Ensuring Tax-Efficient Succession BRIEFING
Passing on the Family Business : Inheritance Tax and Ensuring Tax-Efficient Succession BRIEFING If you are planning to pass on your family business you will need to know the answer to these questions:-
More informationZurich International Portfolio Bond
Zurich International Portfolio Bond Discretionary Discounted Gift Trust adviser guide For intermediary use only not for use with your clients. Contents Introduction 3 1. The main benefits of the Discretionary
More informationLife Assurance Policies
clarityresearch Life Assurance Policies Summary 1. Some life assurance policies are not taken out as a means of purely providing life insurance (for this subject, please see the Research Notes in the Protection
More informationInheritance tax planning and the family home
Inheritance tax planning and the family home An overview and options for lifetime planning technical factsheet Introduction Leading tax and legal experts agree that a family home should only form part
More informationYour guide to UK inheritance tax and trusts. Guide for UK domicile investors only. September 2011. We ll help you get there
Your guide to UK inheritance tax and trusts Guide for UK domicile investors only September 2011 investments pensions PROTECTION We ll help you get there introduction This guide is designed to give you
More informationAn investment product designed for. everyone. A guide to the suitability of offshore bonds for UK professional advisers
An investment product designed for everyone A guide to the suitability of offshore bonds for UK professional advisers 2 Why you should read this guide Tax is the key driver for most offshore life bond
More informationRunning your trust A trustee guide to our Flexible Trust
Running your trust A trustee guide to our Flexible Trust Contents The purpose of this guide 3 The duties and powers of 4 the trustees Power of Appointment Named (Schedule B) Beneficiaries Power to appoint
More informationHelping you understand inheritance tax planning. We ll help you get there
Helping you understand inheritance tax planning investments pensions PROTECTION We ll help you get there As Benjamin Franklin said, In this world nothing is certain but death and taxes. Inheritance tax
More informationInternational Portfolio Bond for Wrap Key Features
International Portfolio Bond for Wrap Key Features This is an important document. Please read it and keep it along with the enclosed personal illustration for future reference. The Financial Conduct Authority
More informationGuide to Relevant Life Policy and Trust
Guide to Relevant Life Policy and Trust Relevant Life Policies are a tax-efficient way of providing death-in-service benefits on an individual basis to company directors and other company employees, no
More informationInternational Bond Key features
International Bond Key features This is an important document. Please read it and keep for future reference. Helping you decide This key features document contains important information about the main
More informationFor financial adviser use only. Not approved for use with customers. Guaranteed Whole Of Life Questions and Answers
For financial adviser use only. Not approved for use with customers. Guaranteed Whole Of Life Questions and nswers Guaranteed Whole Of Life (GWOL) Questions and nswers 1. What is the Inheritance Tax Threshold
More informationDiscretionary Trust Deed
Discretionary Trust Deed Discretionary Trust Deed What is it? A discretionary trust designed for use with life assurance plans including investment bonds. The settlor (the person creating the trust) cannot
More informationTRUST AND ESTATE PLANNING PARTNERS IN MANAGING YOUR WEALTH PARTNERS IN MANAGING YOUR WEALTH
TRUST AND ESTATE PLANNING 1 About St. James s Place At St. James s Place Wealth Management we offer a wide range of high quality services to both individuals and businesses. At the heart of the business
More informationPROTECTION GIFT TRUSTS DISCRETIONARY TRUST PACK.
PROTECTION GIFT TRUSTS DISCRETIONARY TRUST PACK. Technical Guide Discretionary Trust Deed 2 PROTECTION GIFT TRUSTS DISCRETIONARY TRUST PACK INTRODUCTION. This guide has been written to explain what a Discretionary
More informationTax factsheet Single premium life insurance bonds
Tax factsheet Single premium life insurance bonds The rules relating to the taxation of single premium life insurance bonds are complex. This factsheet outlines the tax treatment where a policy is held
More informationDISCRETIONARY TRUST DEED TO USE WITH A SCOTTISH WIDOWS OEIC
DISCRETIONARY TRUST DEED TO USE WITH A SCOTTISH WIDOWS OEIC Below are some guidance notes to help you decide whether you should use this discretionary trust. It is very important that you read these before
More informationGIFT TRUST (CREATING FIXED TRUST INTERESTS) ESTATE PLANNING WITH THE GIFT TRUST
GIFT TRUST (CREATING FIXED TRUST INTERESTS) ESTATE PLANNING WITH THE GIFT TRUST THE GIFT TRUST MAY BE SUITABLE FOR YOU IF: You would like to take advantage of the favourable potentially exempt transfer
More informationDiscretionary Loan Plan Trust Deed and Loan Agreement
Discretionary Loan Plan Trust Deed and Loan Agreement Discretionary Loan Plan Trust Deed What is it? A discretionary trust designed for use with single premium life assurance plans, more commonly known
More informationContents 1 The purpose of a trust 2 The key people involved in a trust 3 Choosing which trust form to use 5 Deciding how to set up the trust 8 Your
Our guide to trusts Contents 1 The purpose of a trust 2 The key people involved in a trust 3 Choosing which trust form to use 5 Deciding how to set up the trust 8 Your questions answered 13 Appendix 1
More informationFlexible Business Trust Deed
Flexible Business Trust Deed The documentation for the Flexible Business Trust is provided in draft format for the approval of your legal advisers. The appropriateness of this trust will depend on the
More informationA guide to the Loan Trust Your questions answered
A guide to the Loan Trust Your questions answered Contents Why might i consider using a loan trust? 3 What is the Loan Trust? 4 How the Loan Trust works 5 Choice of trust 6 The Loan Trust in action 7 Further
More informationFor Adviser use only Not approved for use with clients. Estate Planning
For Adviser use only Not approved for use with clients Adviser Guide Estate Planning Contents Inheritance tax: Facts and figures 4 Summary of IHT rules 5 Choosing a trust 8 Prudence Inheritance Bond (Discounted
More informationA guide to inheritance tax
Sept 2014 Contents: 1. Understanding inheritance tax page 02 more 2. Should I be worried about inheritance tax? page 03 more 3. Inheritance tax planning page 05 more 4. Using gifts page 07 more 5. Using
More informationOnshore Bond for Wrap Key Features
Onshore Bond for Wrap Key Features This is an important document. Please read it and keep it along with your personal illustration for future reference. The Financial Conduct Authority is a financial services
More informationESTATE PLANNING BOND Information for financial advisers AXA: smarter investment solutions
e bl s la ee ai nt Av ara u ow G N th i w ESTATE PLANNING BOND Information for financial advisers AXA: smarter investment solutions 14341_IOMEPB4_BRO.indd 1 18/1/07 3:35:07 pm Estate Planning Bond CONTENTS
More informationINHERITANCE TAX PLANNING - TRUSTS, INSURANCE AND ALTERNATIVES: SIMPLE USES OF INSURANCE POLICIES IN INHERITANCE TAX PLANNING.
INHERITANCE TAX PLANNING - TRUSTS, INSURANCE AND ALTERNATIVES: SIMPLE USES OF INSURANCE POLICIES IN INHERITANCE TAX PLANNING 24 TH NOVEMBER 2009 Simon M c Kie MA (Oxon), Barrister, FCA, CTA (Fellow), APFS,
More informationPROTECTION GIFT TRUSTS FLEXIBLE TRUST PACK.
PROTECTION GIFT TRUSTS FLEXIBLE TRUST PACK. Technical Guide Flexible Trust Deed 2 PROTECTION GIFT TRUSTS FLEXIBLE TRUST PACK INTRODUCTION This guide has been written to explain what a Flexible Trust is,
More informationB1.03: TERM ASSURANCE
B1.03: TERM ASSURANCE SYLLABUS Term assurance Increasing term assurance Decreasing term assurance Mortgage protection Renewable and convertible term assurance Pension term assurance Tax treatment Family
More informationADVISER GUIDE TO RELEVANT LIFE POLICY AND TRUST FROM VITALITYLIFE
ADVISER GUIDE TO RELEVANT LIFE POLICY AND TRUST FROM VITALITYLIFE A Relevant Life Policy provides a lump sum benefit on the death of an employee. It is an alternative way for employers to provide individual
More informationPlanning. Income & Expenditure
Planning Retirement Cashflow Planner Once salary details and amount of net income required at retirement are input, calculator will then look at the client s assets and expected growth to retirement together
More informationHelping your loved ones. Simple steps to providing for your family and friends
Helping your loved ones Simple steps to providing for your family and friends Contents 01 How can I take control of who gets what? 02 Inheritance Tax 04 Do you know how much you re worth? 06 Making lifetime
More informationMETLIFE Group Life (INCLUDING FLEXIBLE BENEFITS) Technical Guide
METLIFE Group Life (INCLUDING FLEXIBLE BENEFITS) Technical Guide 1 MetLife Group Life Policies Technical Guide MetLife has a range of policies aimed to meet your life cover needs in respect of your employees
More informationINVESTMENT BOND FACTSHEET 9 SINGLE AND JOINT INVESTMENT BONDS
INVESTMENT BOND FACTSHEET 9 SINGLE AND JOINT INVESTMENT BONDS Life insurance investment bonds and capital redemption bonds can both be established with single or joint owners. For life insurance investment
More informationPROTECTION GIFT TRUSTS ABSOLUTE TRUST PACK.
PROTECTION GIFT TRUSTS ABSOLUTE TRUST PACK. Technical Guide Absolute Trust Deed 2 PROTECTION GIFT TRUSTS ABSOLUTE TRUST PACK INTRODUCTION This guide has been written to explain what an Absolute Trust is,
More informationFor financial advisers only Relevant life technical guide
For financial advisers only Relevant life technical guide Please note this communication is for financial advisers only. It mustn t be distributed to, or relied on by, customers. About this guide We ve
More informationINHERITANCE TAX PLANNING AND TRUSTS
INHERITANCE TAX PLANNING AND TRUSTS LIFETIME TRUSTS Introduction The Finance Act 2006 introduced significant changes to the Inheritance Tax (IHT) treatment of trusts with effect from 22 March 2006. The
More informationOCTOPUS EVERYTHING YOU NEED TO KNOW ABOUT INHERITANCE TAX
OCTOPUS EVERYTHING YOU NEED TO KNOW ABOUT INHERITANCE TAX CONTENTS Understanding inheritance tax 3 Should I be worried about inheritance tax? 4 Inheritance tax planning 6 Using gifts 8 Using trusts 10
More informationShareholder Protection An Advisor Guide
For Financial Advisors use only Shareholder Protection An Advisor Guide Life Advisory Services This document provides an outline of the taxation issues to be considered when you are putting together a
More informationRelevant Life Insurance
For adviser use only. Not approved for use with customers. Relevant Life Insurance Introducing Relevant Life Insurance Retirement Investments Insurance Health Introducing Relevant Life Insurance We ve
More informationA Guide to Life Insurance Cover Creating your success through Financial Planning
& Guidance A Guide to Life Insurance Cover A Guide to Life Insurance Cover Financial Broker Contents How can I protect my family financially if I die? 02 What is life insurance? 03 What is a Financial
More informationA Guide to Life Insurance Cover Creating your success through Financial Planning
& Guidance A Guide to Life Insurance Cover Contents How can I protect my family financially if I die? 02 What is life insurance? 03 What is a Financial Broker? 06 Why would I need to use a Financial Broker?
More informationRELEVANT TECHNICAL LIFE GUIDE PLAN TO THE RELEVANT LIFE PLAN RELEVANT LIFE PLAN TECHNICAL GUIDE.
RELEVANT TECHNICAL LIFE GUIDE PLAN TO THE RELEVANT LIFE PLAN 1 RELEVANT LIFE PLAN TECHNICAL GUIDE. 2 TECHNICAL GUIDE TO THE RELEVANT LIFE PLAN ABOUT THIS GUIDE This guide has been designed for financial
More informationA Sole Proprietor Insured Buy-Sell Plan
A Sole Proprietor Insured Buy-Sell Plan At a sole proprietor s death, the business is dissolved and all business assets and liabilities become part of the sole proprietor's personal estate. Have you evaluated
More informationTax and Trust Services for business owners and directors
Tax and Trust Services for business owners and directors www.ethosmayfair.co.uk About us 01 Corporate trusts arrangements 02 Renumeration planning 03 Banking 04 Redemption arrangements 05 Credit management
More informationYour guide to taxation in India
Sharing our experience Your guide to taxation in India www.fpinternational.com The tax treatment of our products if you return to India Whilst tax planning might be an important part of your overall financial
More informationThe Bare Trust for an existing policy
The Bare Trust for an existing policy This form is suitable for use with our range of onshore life assurance products, including those which were applied for online. All policy benefits will be gifted,
More informationTax Planning Via the Family Home
Take a typical example, Arthur and his wife Angela. Their circumstances are summarised in the box. They have a heavy IHT liability when they both die (or at least, their children do); what can they do?
More informationKEY FEATURES OF THE RELEVANT LIFE PLAN.
RELEVANT LIFE PLAN KEY FEATURES OF THE RELEVANT LIFE PLAN. LIFE COVER This is an important document which should be kept in a safe place. 2 RELEVANT LIFE PLAN KEY FEATURES USING THIS DOCUMENT. WHAT ARE
More informationTaxable income band Property Interest Dividends
THE TAXATION OF INVESTMENTS The taxation of investments has never been a simple matter. In recent years it has become more complex as successive governments have chosen to tax different sources of investment
More informationAUTUMN 2013 PROFESSIONAL NEWSLETTER
AUTUMN 2013 PROFESSIONAL NEWSLETTER ACT TO GET TAX RELIEF WHILE YOU CAN The recent Government tinkering with the personal tax allowance system means there will be more higher rate (40%) taxpayers in tax
More informationA PLAN FOR EVERY BUSINESS.
BUSINESS PROTECTION GUIDE TO THE RIGHT SOLUTION A PLAN FOR EVERY BUSINESS. With 99.9% of the UK s businesses being SMEs and more than half of these having no protection in place, there s an opportunity
More informationAs for income tax, the tax year runs from 6 April to the following 5 April.
Introduction Capital gains tax (CGT) is a tax on gains arising from disposals of assets. For several years after CGT was first introduced in 1965, if a person bought an asset for X and later sold it for
More informationDiscretionary Trust (DT)
Discretionary Trust (DT) This form is suitable for use when applying for our range of onshore life assurance products, other than those applied for online. It is only to be used for a current application
More informationA GUIDE TO WEALTH PROTECTION FINANCIAL GUIDE PRESERVING YOUR WEALTH FOR THE NEXT GENERATION
A GUIDE TO WEALTH PROTECTION PRESERVING YOUR WEALTH FOR THE NEXT GENERATION FINANCIAL GUIDE A GUIDE TO WEALTJH PROTECTION WELCOME CONTENTS Preserving your wealth for the next generation Welcome to our
More informationCAPITAL GAINS TAX. Disposal of assets. Deductions. Rate of tax. Losses
Capital gains tax CAPITAL GAINS TAX Relatively few people pay CGT each year about 146,000 in 2011/12 according to HMRC estimates but it can have a very considerable impact when it is payable. CGT is charged
More informationA brief guide to Trusts and our Trustbuilder tool
guide to guide to trusts trusts A brief guide to Trusts and our Trustbuilder tool A Brief guide to Trusts and our Trustbuilder tool Introduction This brief guide explains some of the main features and
More informationKEY GUIDE Financial protection for you and your family
Kelvin Financial Planning Ltd KEY GUIDE Financial protection for you and your family Introduction Most of us believe that taking out life and other forms of protection insurance is a good thing to do.
More informationDiscretionary Trust PD (EP)
Discretionary Trust PD (EP) for existing Pension Buyout Plans and Retirement Annuity Contracts This trust incorporates By-pass provisions (see Explanatory Notes). Important If you are not sure this form
More informationInternational Tax information for customers Client Guide
International Tax information for customers Client Guide Contents Please note AXA Wealth International is the brand used for the promotion of international investment products offered by AXA Isle of Man
More informationInvestment bonds. Summary. Who may benefit from an investment bond? TB 33
TB 33 Investment bonds Issued on 1 July 2013. Summary There are a wide range of investments to choose from in today s market. One option is an investment bond which is a life insurance policy purchased
More informationTOLLEY S INCOME TAX 2013-14
TOLLEY S INCOME TAX 2013-14 Life Assurance Policies Extract To order your Tolley s Income Tax 2013-14 visit www.lexisnexis.co.uk or call 0845 3701234 42 Life Assurance Policies Introduction 42.1 Miscellaneous
More informationUsing trusts with life policies
Using trusts with life policies A customer guide to our Flexible Trust Contents The purpose of this guide 3 Part 1 Do I need a trust? 4 Family Protection Providing for Inheritance Tax Inheritance Tax Planning
More information55 Old Broad Street, London, EC2M 1RX Telephone: 020 3755 5068 Fax: 020 7997 6100. Contact us NOW for a FREE consultation A GUIDE TO
55 Old Broad Street, London, EC2M 1RX Telephone: 020 3755 5068 Fax: 020 7997 6100 Website: Email: Contact us NOW for a FREE consultation A GUIDE TO WEALTH PROTECTION PRESERVING YOUR WEALTH FOR THE NEXT
More informationThe Protection Trust Deed. The Protection Trust
The Protection Trust Deed The Protection Trust For use with International Protector Middle East, International Protector Asia and Global Term products. Important note By using this trust deed, the Settlor
More informationDiscretionary Split Trust Deed
Discretionary Split Trust Deed Discretionary Split Trust Deed 2 This trust deed should not be used with plans that provide more life cover than critical illness cover. What is it? A discretionary trust
More informationThinking ahead. An affordable will and estate plan for you and your family
Thinking ahead An affordable will and estate plan for you and your family Thinking ahead Most people understand the importance of having a will and estate plan to safeguard their family s future. However
More informationSweeter tax planning ideas
Sweeter tax planning ideas Helping to ensure you have made full use of the reliefs and allowances available www.bakertilly.co.uk Contents Sweeter tax planning ideas To ensure that you optimise your tax
More informationCOPIA QNUPS Retirement Plan
COPIA QNUPS Retirement Plan FEATURES AND BENEFITS COPIA COPIA Advanced COPIA Advanced Plus 2 COPIA QNUPS Retirement Plan Key Features and Benefits Guide COPIA Retirement Plan The COPIA Retirement Plan
More informationInheritance Tax Avoidance - Pre-Owned Assets
Inheritance Tax Avoidance - Pre-Owned Assets Inheritance tax (IHT) was introduced over 25 years ago and broadly charges to tax certain lifetime gifts of capital and estates on death. With IHT came the
More informationInheritance Tax Guide. www.solicitorsforolderpeoplescotland.co.uk
Inheritance Tax Guide www.solicitorsforolderpeoplescotland.co.uk For more information or to speak to one of our trained advisers please telephone our team on 0800 152 2037 Solicitors For Older People Scotland
More informationWHY MAKE A TRUST? England & Wales. www.step.org
WHY MAKE A TRUST? England & Wales www.step.org 1 WHAT IS A TRUST? Trusts have been used by families for centuries. A trust is the formal transfer of assets (it might be property, shares or just cash) to
More informationA Financial Planning Technical Guide
Insurance and Estate Planning A Financial Planning Technical Guide Securitor Financial Group Limited ABN 48 009 189 495 AFSL 240687 Contents Introduction 1 General insurance 1 Private health insurance
More informationPart 19 - General Issues
Part 19 - General Issues Table of Contents Capital Acquisitions Tax...2 Part 19 - General Issues...2 19.1 Claims for Wages etc....2 19.2 Advances out of residue...2 19.3 The state as ultimate intestate
More informationModule 9: Trusts Used in Financial Services
Module Guidelines Module 9: Trusts Used in Financial Services In Module 3 we looked at the impact IHT can have on a client s estate. The subsequent Modules then surveyed how trusts are used for a variety
More informationGUIDE TO RETIREMENT PLANNING FINANCIAL GUIDE. Making the most of the new pension rules to enjoy freedom and choice in your retirement
GUIDE TO RETIREMENT PLANNING Making the most of the new pension rules to enjoy freedom and choice in your retirement FINANCIAL GUIDE WELCOME Making the most of the new pension rules to enjoy freedom and
More informationCOCKBURN LUCAS INDEPENDENT FINANCIAL CONSULTING
COCKBURN LUCAS INDEPENDENT FINANCIAL CONSULTING Guide to Inheritance Tax Contents This guide provides general guidance only and should not be relied on for major decisions on property or tax. You should
More informationyour uide to a Royal Skandia Excluded Property
PENSIONS INVESTMENTS your uide to a Royal Skandia Excluded Property Trust for non-uk domiciles movin permanently to or currently livin in the UK not for use in Hon Kon and Sin apore. enablin intelli ent
More informationA Corporate Insured Stock Redemption Buy-Sell Plan
A Corporate Insured Stock Redemption Buy-Sell Plan While the death of a shareholder may have no legal effect on a closely-held corporation, without advance planning there are some very real practical consequences
More informationGuide to trusts and being a trustee
Contents P3 P4 P5 Fast facts Could you use a trust? What are the benefits? P10 What trusts do we offer? P10 The split trust P10 The gift trust P10 The probate trust P10 Trusts for joint life policies P11
More informationIntroduction. Income tax. Capital gains tax
Introduction Administering an estate after someone has died is a lengthy, detailed and technical task. Solicitors receive more complaints about the administration of estates than any other single issue.
More informationPreserving your wealth for future generations. Towry s Guide to Estate Planning
Preserving your wealth for future generations Towry s Guide to Estate Planning About Towry We are one of the UK s leading wealth advisers and specialise in providing high quality, expert fi nancial advice
More informationMy client s a US citizen resident in the UK, what do I need to know?
My client s a US citizen resident in the UK, what do I need to know? So if my client s estate is worth less than the Credit Amount, my client has no reason to worry? Unfortunately, it isn t that simple.
More informationKEY GUIDE. Financial protection for you and your family
KEY GUIDE Financial protection for you and your family Introduction Most of us believe that taking out life and other forms of protection insurance is a good thing to do. Protecting your family should
More informationCHAPTER 8 TAX CONSIDERATIONS
CHAPTER 8 TAX CONSIDERATIONS Life insurance traditionally has enjoyed favorable tax treatment. The major advantages are (1) the death benefits of a life policy payable to a beneficiary are not subject
More informationOffshore bonds versus collective investments making your options clear
Offshore solutions Offshore bonds versus collective investments making your options clear For advisers only. Not for use with customers. Background You will be aware of the debate over whether it is better
More informationBRIEFING NOTE. With-Profits Policies
BRIEFING NOTE With-Profits Policies This paper has been prepared by The Actuarial Profession to explain how withprofits policies work. It considers traditional non-pensions endowment policies in some detail
More informationUnderstanding tax. A guide to putting your tax matters in order 2015-16
A guide to putting your tax matters in order 2015-16 Introduction If you re ill or caring for someone who is, you may need to put your financial matters in order. This booklet explains how to handle your
More informationBank Owned Life Insurance. Kirk A. Pelikan 414-223-2529 kapelikan@michaelbest.com
Bank Owned Life Insurance Kirk A. Pelikan 414-223-2529 kapelikan@michaelbest.com BOLI: The Basics BOLI is a life insurance policy purchased by a bank to insure the life of a certain employee. Product has
More informationThe Inheritance Tax Guide
The Inheritance Tax Guide From Cocoon Wealth In this world nothing can be said to be certain, except death and taxes. Benjamin Franklin, 1789 Contents Death and Taxes: Keeping it Simple 3 Do you need to
More informationProvide for your loved ones. A guide to death benefits from your pension plan
Provide for your loved ones A guide to death benefits from your pension plan This guide covers the death benefits from the following plans: Self Invested Personal Pension Group Self Invested Personal Pension
More informationKey Features of the Whole of Life Protection Plan.
WHOLE WHOLE OF OF LIFE LIFE PROTECTION PLAN KEY FEATURES Key Features of the Whole of Life Protection Plan. LIFE ASSURANCE This is an important document which you should keep safely in case you need it
More informationKEY GUIDE. Financial protection for you and your family
KEY GUIDE Financial protection for you and your family Protecting what matters most Life and health insurance protection underpins most good financial planning. These types of insurance can ensure that
More information