Tim Searle TEP on how insurance can be used to complement a trust strategy to protect client’s assets in the UK
UK inheritance tax (IHT) rules changed dramatically in 2017, making traditional offshore structures ineffective for shielding UK property from IHT, regardless of nationality, domicile, or trust arrangements. Many high-net-worth advisors have not updated their strategies, leaving international families exposed to significant tax liabilities.
Key insights:
- UK IHT now applies to most UK property, including homes, shares, art, bank accounts, regardless of ownership structure or jurisdiction.
- Pre-2017 methods (offshore companies + trusts) no longer provide IHT protection.
- Foreign investors often misunderstand UK IHT, increasing the likelihood of accidental exposure.
Advisors must rethink wealth-preservation strategies to reflect modern transparency rules (CRS, FATCA, UBO look-through).
Why Insurance Matters Now
The article highlights insurance as a powerful, often overlooked, tool for foreign investors with UK-situs property:
- Insurance pays the IHT bill when it arises—ensuring the property passes to heirs without forced sales.
- It maintains control and access to the property during the owner’s lifetime.
- It creates quick liquidity outside probate and avoids Shari’a complications.
Offshore insurance solutions can provide:
- coverage for foreign nationals,
- dynamic cover that increases as IHT grows,
- refund of premiums if property is sold in the future.
A comparison in the article shows that insurance can be significantly cheaper than maintaining complex structures over 20 years, while still providing full IHT coverage.
Bottom Line
Modern estate planning for foreign owners of UK property must blend trusts with insurance. Relying on outdated offshore structures creates avoidable tax exposure. Insurance restores certainty, liquidity and family protection in a post-transparency regulatory world.
You can view the full journal here.
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