Employer Life Assurance - IHT liable and LTA impacting?

Hello there - I’m doing some affairs tidying up , wills, POA etc and taking a sidewards look at IHT. 

I’m lucky enough to have Life Assurance from my employer which is generous and I take the option to up it more so it’s basically a significant sum over £500K

It is, I believe, a fairly typical scheme where I fill in “Beneficiaries” form  and the payout is to Trustees of the scheme. Is this typically IHT exempt and would not form part of my estate IHT calculation? 

Secondly, I noticed on my employer benefits site a paragraph saying that LTA Pension would be affected by this payout - I had never connected the two - does this mean it’s somehow written as a pension benefit or something like that? . In this case it WOULD tip me over LTA if it was correct. 

Thank you

Replies

  • dunstonhdunstonh Forumite
    112.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Forumite
    Secondly, I noticed on my employer benefits site a paragraph saying that LTA Pension would be affected by this payout - I had never connected the two - does this mean it’s somehow written as a pension benefit or something like that?
    This life assurance falls under pension legislation and would not form part of your estate.

    In this case it WOULD tip me over LTA if it was correct. 
    Potentially yes.   Basically, it would leave just over £500k available for your pension.   A DB scheme or well funded DC scheme could easily go through that figure.


       
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
Sign In or Register to comment.
Latest MSE News and Guides

British Gas prepay meter users...

...to pay less for gas from 1 April

MSE News

The 'odd Easter flavours' thread 2023

What bizarre food stuffs have you spied?

MSE Forum

Energy Price Guarantee calculator

How much you'll likely pay from April

MSE Tools