2. Set up a trust fund
Traditionally trust funds are set up to ring-fence assets for children and young people who aren’t yet financially independent.
But trusts are also a fantastic way to reduce or avoid inheritance tax payments altogether. Trust funds are fully protected from inheritance tax and can be set up at any time.
Trusts can be set up to provide advance payments drip-fed to family members to allow them to receive inheritance early. But trust funds also have benefits for those with life insurance policies, as they provide a significant amount of tax relief.
Without trust funds, in place your life insurance payout is added to your estate and taxed. When your life insurance is set up in trust it cannot be included in any inheritance tax calculation.