Don’t Make The Taxman A Beneficiary!

If you are fortunate enough to be part of a Death In Service scheme through your employer, you have probably been asked to fill in a ‘Nomination of Wishes’ form to let them know who is to receive the lump sum benefit if and when it is paid out. In most cases it will be a spouse or other family member who is nominated.

So if you were to die before reaching retirement, this lump sum death benefit would be paid directly to your nominated beneficiary. This is good because it means that the lump sum – typically in excess of £100k – will not form part of your estate on death and thus not subject to 40% Inheritance Tax.

However, the money will then be in the estate of your nominated beneficiary for Inheritance Tax purposes. So if they died then any remaining lump sum death benefit that they received from your scheme would be included in their estate on death and thus subject to 40% Inheritance Tax.

If you want to make sure that the Taxman doesn’t ever get their hands on any of this money, we can help you to set up a special Death In Service Trust to receive any lump sum benefits that may be paid out in the future. This structure ensures that the funds are never subject to the punitive 40% Inheritance Tax charge, as the fund is held outside of your beneficiaries estate, and thus 100% of the money held by your Trust is available for your loved ones future needs.

Don’t make the Taxman a potential beneficiary of your Death In Service scheme – get in touch with us now to see how we can help.

Please contact Michael on 07808 131383 or visit our website at www.probateni.com