Note

• Tax regulations vary from country to country
• Usually a certain percentage of net assets above tax-free amounts

Cover

• Usually WoL Joint Life second death for spouses
• Single life cover is possible, if there is no spouse or if the spouse is not liable for IHT
• If one person is medically uninsurable and would be declined, joint life cover can be granted with deathbed cover for the one that is ill
• Term cover instead of WoL is possible if the applicant intends to decrease their IHT liability (e.g. gifts, change of residence)

Purpose

• Cover arising from IHT liability in case of death
• Prevent heirs from having to liquidate assets

Beneficiary

Legal heirs

Insured

High net-worth individuals

Evidence

Depending on sum assured: 

• Application
• Financial questionnaire: Inheritance tax
• Breakdown of assets, liabilities, and inheritance tax liability confirmed by an independent third party (e.g. accountant, lawyer, financial consultant, etc.)

Income

Net assets

Calculation

• Net assets = assets – liabilities
• Deduct any business / agricultural property reliefs or any other tax breaks
• Deduct foreign assets which do not fall under local IHT law
• Deduct tax free amounts
• Apply market-specific taxation (fixed percentage or scale)
• Take special care with:
  • Valuations
  • Decreasing IHT liability (shorter duration)
  • Gifts (special IHT regulations for gifts)
  • Trust funds
  • Residence