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Inheritance Tax Life Assurance

S72 life insurance to pay inheritance tax

Did you know we have one of the highest death taxes in the world here in Ireland.

It’s more commonly known as inheritance tax.

It takes one-third of what you intended to leave behind for your kids and gives it to The Taxman instead…unless you put a plan in place to pay that inheritance tax.

How does inheritance tax work?

When you die and leave something nice behind, the person receiving the gift may have to pay tax on it.

Why – because the government are bastards and want to tax you out the wazoo when you’re alive and when you’re 6 feet under/buried at sea/wafting around your favourite park.

If you’re married or a civil partner, there is no inheritance tax regardless of the size of the inheritance. This is the real reason people get married folks . Love, schmove.

But your children could be hit with a massive tax bill.

The first €325,000 your kids receive in their lifetime is tax-free.

Anything above €325,000 is taxed at a whopping 33%.


Let’s say you have one child who receives a house worth €600,000 and shares valued at €86,000.

inheritance tax life insurance quote

This results in an inheritance tax bill of €115,830

What if little Johnny doesn’t have that sort of cash in  so has to sell the family home to pay the tax bill..

A home that could be in your family for generations.

I’m sure you’d want to avoid this scenario and you can with inheritance tax life assurance.

What is inheritance tax life assurance?

Inheritance tax life assurance is a special type of whole of  life insurance where the proceeds of any payout are tax-free if used to pay an inheritance tax bill.

It’s also known as Section 72 Life Insurance.

In the example above you could take out a Section 72 life insurance policy for €152,000. On your death your child would get your home and shares while the Revenue would get the proceeds of your life insurance to pay the inheritance tax bill.

How much inheritance tax life assurance do you need?

Here’s a handy inheritance tax liability calculator.

However if your personal situation is complex, you should take independent tax advice before proceeding with a S72 life insurance policy.

How much does a Section 72 Policy cost?

Like all life insurance policies, it depends on:

  • your age,
  • health,
  • whether you smoke
  • and the amount of cover.

It’s underwritten in the same way as a normal life insurance policy.

Further reading:

Is Tax Liable on Life Insurance Payouts in Ireland?

Over to you…

Unfortunately, we can’t quote online for inheritance tax life assurance but give me a call on 05793 20836 and I’d be happy to help. If you prefer a quote over, just complete this short form.


Nick McGowan | making life insurance easier


Life Insurance
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