Some individuals who know that there will be an IHT liability when they die, do not wish to consider any of the options listed previously, or they have assets that it is not possible to give away for practical or sentimental reasons.  There are still options open for them.

Let us consider an individual whose main asset is the house in which they live and there will be an IHT liability on their death of approximately £100,000.  This would mean that the property would need to be sold on death to realise the liquidity to settle the IHT liability.

An alternative would be to fund a life assurance policy, written in trust which will pay out a cash sum on death (which will not be liable to IHT) so that the IHT liability on the estate can easily be settled without having to realise illiquid assets.

The cost of such a solution will of course depend the age and health of the individual.  However, the premiums for the life policy will be paid monthly or annually and the policy will pay out a fixed sum on death.  It is simply about taking a view whether such an option is attractive and this will of course depend upon personal circumstances.


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