Page 194 - Guerin Media Ltd | Active Retirement Ireland Members Annual 2016
P. 194
FINANCIAL PLANNING FOR YOUR FUTURE BE INFORMED
2. Use the annual €3,000 Gift Tax Exemption – in this So how does the Life Insurance Company make money
example Sean could have set up regular savings on this type of contract? In reality clients allow policies
plans for different family members over the years. to lapse. Their circumstances can change and inertia can
Revenue will allow a €3,000 gift to another person set in. From the Life Insurance Company’s viewpoint, it’s
each year without applying Gift Tax (also currently simply a numbers game.
33%) to the gift. So for example, 10 Grandchildren To discuss this important area of financial planning in
could receive €30,000 per year tax free. more detail or for a no-obligation quote, please contact:
3. Be aware of Farm Relief, Business Relief, Favourite Ronnie Giblin
Nephew Relief, Retirement Relief and Family Home Qualified Financial Adviser
Relief. You can contact me for more specific informa- Giblin Financial Services
tion in these reliefs.
Glenbrack Road
A SOLUTION: Gort, Co. Galway
Consider taking out a Section 72 Life Insurance Policy. 091 631306 | 086 0436161
Let’s go back to Sean and Sinead. Assuming that Sean info@giblinfs.com | www.giblinfs.com
wants his daughter to inherit all of his assets and had
not availed of the annual gift tax exemption or other
reliefs, he could have taken out a Section 72 Life Policy
to the value of €255,750 - or part of it depending upon
his affordability.
It would work as follows:
ÂÂ Life Cover of €225,750 payable upon Sean’s death,
taken out when he was 64.
ÂÂ He pays a guaranteed monthly cost of €645.25
*(no increases or reviews), assuming he gets
accepted by a Life Insurance Company. Source:
Zurich Life August 2015.
ÂÂ After ten years Sean would have paid €77,430 into
the policy at the time of his death.
ÂÂ The Life Insurance Company pays out €225,770 to
Sean’s estate which is specifically used to pay the
C.A.T bill.
Result:
Sinead pays the tax bill with the Life Insurance pro-
ceeds; she inherits her father’s estate and does not
have to worry about selling assets or borrowing money
to pay the bill.
From a cost point of view, Sean would have paid in the
full amount of Life Cover at age 93, had he lived that
long. The average life expectancy in Ireland for a male
at Sean’s age when he took out his Section 72 policy is
88.
194 Active Retirement Ireland www.activeirl.ie
2. Use the annual €3,000 Gift Tax Exemption – in this So how does the Life Insurance Company make money
example Sean could have set up regular savings on this type of contract? In reality clients allow policies
plans for different family members over the years. to lapse. Their circumstances can change and inertia can
Revenue will allow a €3,000 gift to another person set in. From the Life Insurance Company’s viewpoint, it’s
each year without applying Gift Tax (also currently simply a numbers game.
33%) to the gift. So for example, 10 Grandchildren To discuss this important area of financial planning in
could receive €30,000 per year tax free. more detail or for a no-obligation quote, please contact:
3. Be aware of Farm Relief, Business Relief, Favourite Ronnie Giblin
Nephew Relief, Retirement Relief and Family Home Qualified Financial Adviser
Relief. You can contact me for more specific informa- Giblin Financial Services
tion in these reliefs.
Glenbrack Road
A SOLUTION: Gort, Co. Galway
Consider taking out a Section 72 Life Insurance Policy. 091 631306 | 086 0436161
Let’s go back to Sean and Sinead. Assuming that Sean info@giblinfs.com | www.giblinfs.com
wants his daughter to inherit all of his assets and had
not availed of the annual gift tax exemption or other
reliefs, he could have taken out a Section 72 Life Policy
to the value of €255,750 - or part of it depending upon
his affordability.
It would work as follows:
ÂÂ Life Cover of €225,750 payable upon Sean’s death,
taken out when he was 64.
ÂÂ He pays a guaranteed monthly cost of €645.25
*(no increases or reviews), assuming he gets
accepted by a Life Insurance Company. Source:
Zurich Life August 2015.
ÂÂ After ten years Sean would have paid €77,430 into
the policy at the time of his death.
ÂÂ The Life Insurance Company pays out €225,770 to
Sean’s estate which is specifically used to pay the
C.A.T bill.
Result:
Sinead pays the tax bill with the Life Insurance pro-
ceeds; she inherits her father’s estate and does not
have to worry about selling assets or borrowing money
to pay the bill.
From a cost point of view, Sean would have paid in the
full amount of Life Cover at age 93, had he lived that
long. The average life expectancy in Ireland for a male
at Sean’s age when he took out his Section 72 policy is
88.
194 Active Retirement Ireland www.activeirl.ie
