How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Clare Your Own Question
Clare, Solicitor
Category: Law
Satisfied Customers: 35059
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
Type Your Law Question Here...
Clare is online now

A UK citizen also a grandmother of Indian origin , wants to

This answer was rated:

A UK citizen also a grandmother of Indian origin , wants to buy a life insurance policy in India.
She will pay the premiums and her grand children will be the Life Assured.
She wants to create the trust like the ones created by Life Insurance companies in the UK so that the proceeds can go directly to the grandchildren and not be taxed under the inheritance tax.
Is that possible ?
Will the proceeds from such a life insurance policy encased in a trust in the UK be free of inheritance tax to the beneficiary the grand child?
HiThank you for your questionMy name is ***** ***** do my best to help you but I need some further detailsDo you mean that she will name the grandchildren as the beneficiaries?
Customer: replied 2 years ago.
OkBut the policies are from Indian Companies.Does she live in India?
Customer: replied 2 years ago.
She stays abroad largely in the UK
But what you are enquiring about is how the policies will be treated in India?
Customer: replied 2 years ago.
No Claire there is no inheritance tax in India the question is when the maturity comes out say after 5 years to the grandchild would the same be taxed under the UK inheritance laws ?The inheritance would be less than GBP 325000 to the grand child.If inheritance tax would be applicable then how does she mitigate it?We understand that life insurance companies incorporated in the UK can create trusts , the query was can a similar trust be created to encase the policy issued by an Indian insurer? Would that ensure no inheritance tax liability on the trust and trustee?
If the grand child is the named beneficiary then the money passes to the grandchild outside of the Will and is not part of the Estate for Inheritance tax purposes.I hope that this is of assistance - please ask if you need further detailsClare
Customer: replied 2 years ago.
Thanks Clare, would the Adult Grandchild be subject to taxation either under the Income tax rules or the Gift Tax rules ?
Not in the UK upon receipt of the monies.
Clare and other Law Specialists are ready to help you