Yes or no, depending on the size of your estate and the approach you decide to take.
The proceeds from a life insurance pay out are not liable to either income or capital gains tax.
However, generally speaking, they do form part of the deceased’s estate, which depending on its size, could be subject to 40% inheritance tax.
An estate includes any property, savings and investments, possessions in your name and importantly for us in this article your life insurance policy.
However, any money used to cover personal debt and funeral costs are exempt from your estate.
Let’s delve into the detail to help inform you how your loved ones can reduce tax and make the most of your selfless investment…