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Life Assurance
Protecting your family or lifestyle to provide adequate financial
provision to cope with the unexpected is the cornerstone of sound financial
planning.
Strictly speaking there are three different classifications of life and or critical
illness assurance policy:
Protection Policies and Potential Inheritance Tax Liabilities
Under current legislation the benefits payable under Life Assurance Contracts and
Family Income Benefit Plans are free of Capital Gains Tax and Income Tax. However,
as a general rule of thumb, plans should be written in trust so that any death benefits fall
outside of the applicable estate for Inheritance Tax purposes. This action will
also facilitate timely payment to beneficiaries as no grant of probate will be required.
Care should be taken when applying for Life Assurance as many ‘off the shelf’ products will not automatically be written in trust. Currently estates in excess of £300,000 suffer a 40% Inheritance Tax charge.