Life assurance and CTT - more

These rules mean that there is scope for using life assurance under the various exemptions and passing capital on to children or any other dependants without having to pay CTT.

What parents usually do is to arrange to have the benefits of any endowment policy paid to the child when it reaches 18, or some other suitable anniversary.

As there is no CTT to pay on estates which husbands and wives leave to one another, it is other bequests - usually to children which need protection, and as the proceeds of life assurance, bring a cash sum, it is a means of ensuring that there is enough money to pay any CTT on death, presumably the second death. It does not cost a great deal of money for a life assurance policy with or without profits for the benefit of the children on the joint lives of the husband and wife, payable on the death of the survivor.

Premiums on joint life policies usually continue until the second death, or until the husband is 65, and if husbands are the first to die, as they often are, there can be problems in keeping up the premiums from a reduced income. A way round this is to take out a family income policy on the husbands life as well as the joint life policy, to provide the funds to continue the premium payments after his death.

The exemptions from CTT usually mean that there is no tax to pay on the premiums of such policies.


CTT

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

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read on: Life assurance and CTT - more2

These rules mean that there is scope for using life assurance under the various exemptions and passing capital on to children or any other dependants without having to pay CTT.

What parents usually do is to arrange to have the benefits of any endowment policy paid to the child when it reaches 18, or some other suitable anniversary.

As there is no CTT to pay on estates which husbands and wives leave to one another, it is other bequests - usually to children which need protection, and as the proceeds of life assurance, bring a cash sum, it is a means of ensuring that there is enough... see: Life assurance and CTT - more2