Cohabiting couples – the unintended Inheritance tax nightmare!
There are two important points to be aware of when arranging a protection policy for non-married/cohabiting couples:
1. If they arrange a protection policy on their own lives for whatever purpose, the surviving partner may be left with an inheritance liability. If the survivor is deemed not to have paid premiums, problems arise!
2. That they are still treated as strangers in the eyes of Revenue so for inheritance tax purposes, the threshold which applies being €16,250. Care is needed as to how policies are set up, with the following considerations
• Who pays the premiums?
• Can the small gifts exemption be used?
• The Dwelling House Exemption?
When you are putting a life insurance policy in place, make sure you talk to a Financial Broker. I can talk you through the most tax efficient options.