Life Cover for unmarried couples
So here's the Problem:
Most people are aware that inheritances passing between married couples or registered civil partners are exempt from inheritance tax. This exemption only applies for legal spouses and registered civil partners. All other co-habiting couples are treated as strangers for inheritance tax purposes!
- As long as you have an insurable interest in your co-habiting partner, you can take out a policy and pay for the their cover. You are the 'owner' of the policy, but they are the 'life covered'. This is called - 'Life of Another'.
- You can increase the level of cover you are taking out on a 'joint' basis by the potential tax liability. This will serve as a way to reduce the total tax bill that would be payable.