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CanProtect Whole of Life Plan

Protecting your family’s wealth

The CanProtect Whole of Life plan is an offshore whole of life assurance policy designed to pay a lump sum when you die to cover a potential inheritance tax liability. You can use our plan if you are a UK resident or not, and if you are UK domiciled or not.

Estate Planning Life Group

Isabella’s story

Concerned about UK inheritance tax

About Isabella

Isabella, 40, was born in Spain and works for a global business her father owns. She has worked for the business for a number of years in various locations around the world. Her father recently asked her to run his business interests in the UK. Isabella relocated to the firm’s London office for the foreseeable future but plans to retire back to Spain.

Isabella is financially independent and has assets in Spain of around £10m. She’s used part of this wealth to buy a property in London for £4m, which she intends to keep as an investment when she returns to Spain. 

The rest of her wealth is in Spain – a mixture of cash, investments and property. This generates a healthy income, which is in addition to the salary she receives from the business. Isabella uses the remittance basis so that any income or gains generated outside the UK are not subject to UK taxes. She’s aware that she will need to pay a Remittance Basis Charge in the future.

What are Isabella’s objectives?

Isabella is concerned about the UK inheritance tax she may be liable for and wants to mitigate this if possible.

What does Isabella get?

Isabella’s adviser explains that she would be classed as a non-UK domicile when she moves to the UK and will only be liable for inheritance tax on her UK assets – the London property.  

Her Spanish assets won’t be included in her estate unless she becomes a UK domicile or is deemed UK domicile, which occurs once she has been resident in the UK for 15 out of 20 years. This would increase her exposure to inheritance tax significantly but she plans to return to Spain before this time.

After allowing for her nil rate band and residence nil rate band, the liability on the London property is £1.4m. 

Her adviser suggested a CanProtect Whole of Life policy from Canada Life International held under a discretionary trust. This will have a sum assured sufficient enough to cover the inheritance tax liability. In the event of Isabella’s death, the trustees will receive a lump sum that they can use to pay the inheritance tax liability. 

Also, as she has foreign income and Canada Life International is not based in the UK, her Spanish income can pay for the premiums without it being remitted to the UK first.

What are the risks?

The cost of the life assurance is reviewable and will increase in the future.

If the inheritance tax liability increases then the sum assured may not be sufficient to cover the whole liability.