Charles Holt (Lincoln)

The proposed changes to Inheritance Tax and the massive alterations to Agricultural (and Business) Property Relief are very hot political issues within agriculture, and rightly so.  The changes, if passed as proposed, will inevitably have huge effects on some family farms, estates and businesses.

In this piece I want to look briefly at life insurance to mitigate some of its worst effects, for some families.  Clearly it cannot help everyone, especially where the potential donor is elderly or already in poor health.  That is where the changes are most unfair, as the time of our death is (almost) never of our choosing and cannot be predicted.  So, you cannot plan for its timing, but you may be able to insure against it.

Life insurance has been covered widely elsewhere, but I just want readers to consider one aspect of it.  That is, very simply, it is much cheaper when you are reasonably young, and especially when you are in good health.  So, if you are in this fortunate situation, consider sorting it out now.  This is simply because you never know what is around the corner, and what episode of poor health may appear at any moment.

This advice should also apply to the younger generation to whom an asset is being left.  Clearly children, or young adults, are never expected to pre-decease their parents, but they do sometimes.  I know of cases where this has happened, and the parents never expected to have to take over the reins of the farm again, having retired.

All these discussions can be had now, with your business advisors, before the IHT changes become certain.  Taking out some cover now, even if it is changed in a few years’ time, could be well worth it.   

Contact Charles at charlesholt@fcgagric.com or your local FCG Office, to help you start the conversation and facilitate succession plans with the involvement of your accounts and solicitors.