Inheritance tax planing

[elainem]

I have an inheritance tax policy for my kids which is costing e150 per month for e300,000 cover. I also have life assurance cover for e400,000. Have property assessts which have gone down considerably, but kids would still owe something on them if anything happened to me. 2 kids. My solr. thinks these inheritance tax policies are too expensive. He thinks though the life assurance would be taxable, that this could be used for inheritance tax instead. Any comments welcome.

 

[Graham_07]

As you will be aware Section 60 policies such as you have allow for the payment of inheritance tax without eating into the estate.

Ordinary single life insurance policies would be paid into your estate and be distributed to the beneficiaries subject to the tax thresholds applying. The beneficiaries would have the cash from the policy to pay the inheritance tax but that would of course reduce the remaining cash.

You probably need to talk with both your solicitor and a financial advisor to see if the net cost of the Section 60 policy is worth it. Bear in mind that if the Section 60 policy at €300,000 exceeds the CAT arising then then the excess is taxable as part of your estate.

 

[elainem]

Thanks Graham07 for your reply. My instinct is to keep the Section S60 policy. At the time, I researched the policy extensively, and really felt it was the best option, esp if life policies end up being taxed at 40% should inheritance tax increase to what it was in the 80s early 90s.