How to invest your money, save Inheritance Tax and earn more interest than from your bank

Aug 8, 2018 | Tony Byrne's View

 

I know this sounds too good to be true but believe me it’s not.

There is an Inheritance Tax (IHT) mitigation plan called the Foresight Accelerated Inheritance Tax Solution. The plan consists of an investment which qualifies for 100% business relief after 2 years which means that after you have invested in the plan for this long it is no longer subject to IHT on your estate. Furthermore it pays you an income of c.3% a year which is at least three times what you would earn from a bank or a Building Society deposit.

In addition to these benefits you have access to your investment at any time should you need it. Obviously however much you withdraw from the investment will no longer be outside of your estate so unless you spend it or gift it this amount will form part of your estate when you die and you will pay IHT on its value at death.

The unique feature about this plan is that it provides 2 years’ worth of life insurance to cover the 40% IHT your estate will suffer if you do not live for 2 years after investing in the plan. What’s more the life cover is given without medical underwriting or a medical questionnaire! So you will qualify for the life insurance as long as you are aged under 90!

We set up a Foresight Accelerated ITS Plan for a 64 year old client of ours 18 months ago with an investment of £200,000. Sadly he died after a year. Foresight paid out £80,000. No questions asked.

The only problem was that our client died as a result of an accident so there had to be an inquest by a coroner. This meant that a death certificate couldn’t be issued for about 6 months. The insurance payout can only be made on receipt of a death certificate. The executors were initially given a Certificate of Fact of Death which Foresight could not accept.

The downside is that the insurance is quite expensive so the first 2 years’ income is wiped out by the cost of the insurance premiums. So if you survive 2 years you will have lost income and paid for insurance you haven’t used. If on the other hand you die within 2 years your estate will have saved a significant amount of Inheritance Tax.

If you are interested in simple yet effective ways of saving Inheritance Tax why not contact us and ask for an estate planning review? You know it makes sense.

Share:

Archives

Subscribe