Inheritance Tax warning: Why your life insurance payout could end up being subject to IHT

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For example, if one leaves everything above the £325,000 threshold to their spouse, refined partner, a charity, or a community amateur sports club, then there is normally no Birthright Tax to pay.

During one’s lifetime, it may be that a person takes out a life insurance programme.

While the reasons for doing this can vary, a tax partner has shared some acuity into doing this.

James Kipping, Tax Partner at MHA Macintyre Hudson, touch oned Express.co.uk: “If you take out a life insurance policy, it will not reduce the amount of Patrimony Tax due on your estate, but the payout might make it easier for your surviving dearest to pay the bill.

READ MORE: Inheritance Tax: Brits warned to review their purpose – could you shave £140k off IHT bill?

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