Foresight Group Launches New Joint Insurance/ Investment Deal



Posted on: 28th November 2016

Wealthy savers now have the option of a joint insurance and investment deal, which can provide instance cover from death duties. Those interested in protecting themselves from inheritance tax will be required to invest at least £25,000, along with a 2.5% initial fee and two annual interest payments over the first two years.

Nevertheless, the potential savings for those taking part in the program could be enormous.

The Foresight Accelerated Inheritance Tax Solution works by providing the saver with access to investments that are eligible for Business Property Relief after 24 months. The insurance policy the saver is provided with is for the first two years of the scheme, in order to cover 40% of their inheritance tax bill in the case of death during these years.

The first scheme of its kind to be launched in the UK, previous options from the Foresight Group allowed for savers to enter into investments that qualified for Business Property Relief, but would remain exposed and liable for full inheritance tax payment if death occurred during the first two years.

In order to qualify for participation in the scheme, the saver must meet the minimum deposit requirements, while at the same time confirm that they have not been diagnosed with any illness that may result in their death within the next year. They must also be under the age of 90, in order to qualify.

Foresight Group director Hugi Clarke took the opportunity to lash out at the government’s current policy on inheritance tax, stating that the system is far too complicated and misleading.

‘The UK has an overly-complicated and confusing set of inheritance tax rules which aren’t fit for purpose following changes made by successive governments,’ he said

‘Legislation that allowed the super-rich, such as the Duke of Westminster, to pass on billions of pounds in assets free of inheritance tax are draped in complexity – including taxes on entry, periodic charges and exit charges which make them virtually impossible for the layman to comprehend.’

‘Anyone with a single estate valued at £325,000, or a joint estate of £650,000 really should be looking to mitigate their inheritance tax risks, as should all those who are in real danger of house price increases and inflation pushing them into these brackets in coming years.’

‘The Treasury is taking more and more from inheritance tax – people need to plan in advance to protect the assets they have worked so hard to build during their lifetime. ‘

‘However, the products that are often used to mitigate inheritance tax can come with a sting in the tail. For example gifts and trusts can take several years to be fully effective and can mean giving up control of assets.’

The government recently discussed on-going plans to remove the burden of inheritance tax from the vast majority of households by the end of the current decade. By that time, couples with combined assets of up to £1 million will not be liable for any inheritance taxation whatsoever.

Posted in Tax