The wealthy turns into life insurance to soften the stroke of the inheritance tax in the new UK

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The rich in Britain turns into life insurance to reduce the pain of unexpected inheritance tax bills after a controversial repair of the system in the autumn budget.

“Every market has a day in the sun. Life insurance has a need,” said Holly Hill, assistant director of the insurance broker, John Lamb Hill Oldridge, adding that she had seen a “flood” of the new policies taken by real estate owners after the budget in October last year.

John Lamb Hill Oldridge said he was previously writing new life insurance policies for 30 rich agents at any time, but since the announcement of tax reforms, the number has risen to 110.

In Rachel Reeves first budget As an advisor, it announced the reforms of agricultural property relief (APR) and commercial real estate relief (BPR). As a result of the changes, people with large real estate or companies previously exempt will pay the inheritance tax by 20 percent on assets of more than one million pounds from April 2026.

Reeves also confirmed the cancellation of an unprecedented system, which allowed the British population who announced that their permanent home was abroad to avoid payment UK tax On foreign income and gains.

There is no number for the number of wealthy individuals who secured life insurance and the amount of their insurance. But Hill said that her company has policies covering 3.5 billion pounds, which is the inheritance tax on assets of 8.75 billion pounds.

Advisors said that people come out of the fixed policies, which they cover for a specific period of their lives, and a full cover for life.

Life insurance policies are complicated by confidence and can be an effective way to settle the IHT bill for the drug. Both types of policy are pushed in the event of death, ensuring that the heirs are not forced to quickly sell assets to pay the UK’s tax authority within six months of death.

Hill said that ex -agents from non -states have moved abroad, but they kept their property in the United Kingdom.

There is a “huge increase in demand” to meet the new tax obligations.

There were indications of the new demand from early 2024, when then Prime Minister Jeremy Hunt announced that he wanted to cancel the non -periodic system, which gave people protection from IHT on non -civil assets.

“In the past, we have not worked with the insurance industry a lot, we can prepare good protection, but now we have individuals who believed their wealth other than today is protected and was not suddenly,” said Catherine Harrison, a partner at Charles Russell’s law firm, said.

Harrison said that life insurance “could be amazingly good.”

She said that if he is not working, he pays the annual fees of 90,000 pounds to use the “basis of tax transfers” under the previous system, they can now spend it on protecting the inheritance tax instead.

Those who decided to stay in the UK will see their origins all over the world may be subject to the record average of the inheritance tax by 40 percent.

The Treasury expects that a non-DOM system will end will bring 12.7 billion pounds by 2029-30, while the change in APR and BPR will collect 1.8 billion pounds.