Lycetts Financial Services

Inheritance Tax Provisions

It is not always appropriate to gift assets either directly to a beneficiary or into a Trust.

The reasons for this are as follows:


  • Concern regarding the donor’s long term financial requirements;


  • Concern regarding the readiness of the donee to receive the gift;


  • Concern regarding the potential divorce of the donee;


  • Concern regarding the costs and administration of setting up a Trust as the donee; and/or


  • Concern as to which child is the most appropriate to inherit assets.


Inheritance Tax Provision through Life Assurance is a viable means to protect the Estate and avoid a forced sale. It can also provide a useful means of diversification for an estate. There are a number of different options available here at Lycetts:


  • Death by Accident only: a sum assured equal to the potential IHT liability would be paid in the event of death as a result of an accident only. This type of policy is renewed annually at the discretion of the insurers;


  • Level Term Assurance cover is provided: in the event of death by any cause during a specified term (ten years, for example);


  • Whole of Life Assurance: a sum assured is payable on death whenever that may occur and premiums can either be short term and reviewable or long term and guaranteed; and/or


  • Gift Inter-Vivos: where a gift has been made as a Potentially Exempt Transfer (PET), Life Assurance can be taken out to provide for the potential IHT liability in the event of death during the seven years following the PET.

Nick Straker


Contact Nick Contact The Team

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