While every estate is subject to inheritance tax, the reality is that only the minority of estates reach the thresholds after which the tax is due. To understand inheritance tax, it’s important to get familiar with certain terms;

  • ‘Estate This means everything of value that’s left behind by a person when they die.it is the total value of their house, savings, jewellery etc., they are all evaluated and calculated and total is defined as the value of the estate.
  • ’Hiers’, the people who the estate will pass on.
  • ’Inheritance tax’, the amount owed to HMRC calculated from the estate value.
  • ‘Nil Rate Band(NRB)’, the lowest threshold under which there is no tax owed.
  • ’Residence Nil Rate Band’, an additional threshold for zero tax offered if the home part of the estate is passed to surviving descendants. 

Inheritance is paid by all heirs excluding a direct spouse or civil partner of the deceased. Inheritance tax is also relinquished for any part of the estate that is passed to a charity. inheritance tax is calculated as 40% of the estate value beyond the total of the nil rate band plus any applicable residence nil rate band.

How can Life Insurance help?

By having a life cover in place, the liquid funds can be paid to the heirs to cover the anticipated inheritance tax. A life insurance policy in trust for £100,000 would be passed as a clear tax-free sum to the heir who could then use the money to pay for the inheritance tax for home and prevent its unfortunate sale.

In case of inheritance tax, the best considerate product is a whole of life insurance. Whole of life cover has no end term, which means that no matter when you die, it will payout. If you are looking to pass a sizable estate to your heirs, then you do not want a level of cover that stops once you retire or decreases in size. Whole of life is the simplest-to-understand- you pay a regular monthly premium and it ensures the right payout to cover that final hit of inheritance tax. 



We would recommend you to talk to one of our advisers for life insurance quotes.
Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!
Call 011-3733-4610 – Monday to Thursday from 11.00 to 19.00 and on Friday between 11.00 and 16.00
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