I have heard all kinds of solutions with regards to my inheritance tax bill which would be due when I pass away. I used to believe it would be best to put Life Cover in place which would pay enough money to cover any potential tax bill.
However it would be expensive to pay an amount each month to cover a liability, especially as I would have to pay this for the rest of my life, and 40 years of payments would work out extremely expensive!!
Therefore I have opted for a strategy where you hold your invested funds more tax efficiently, as it is possible to place this money outside your estate as a method of Inheritance Tax Planning. I would still have control over this money, be able to receive an income each year if required, but also be able to assign the money to my beneficiaries if they need it, and it would not have to take another 7 years for it to be considered outside my estate for inheritance tax purposes.
Therefore a strategy of holding my money in trust works out far more efficient than putting life cover in place to pay a potential bill.