The offshore plan solution
- Clients are a married couple with an estate worth £850,000, of which their house is a major part
- They can't afford to give away a sizeable amount of capital, but do want to mitigate the IHT liability
- Clients opt for life assurance and, as they don't want to spend capital, they choose to fund it out of income
- They take out a Flexible Life Plan on a joint life second death basis, with a sum assured of £200,000
- The plan will be subject to regular reviews
- The plan is set up in a discretionary Gift Trust with their children as beneficiaries
- At the second death, the trustees will pay out the proceeds, free of inheritance tax
- Beneficiaries and shares are at the trustees' discretion; client is a trustee while alive.
- The children can use the proceeds to offset the IHT bill on the estate
This is just an example designed to represent a typical situation and does not relate to any particular individual. It is not intended as financial advice or a recommendation of a particular course of action.
