Advisers warned of annuities IHT risk

The firm says advisers need to ensure providers make guarantee payments at their own discretion, or the annuity will face double taxation. Many annuities carry five or ten-year income guarantees to protect their value if the annuitant dies early, but LV= warns they can fall foul of HMRC rules. According to LV=, a 65-year old male buying an annuity with a 10-year income guarantee at around £7,000 per annum would face an inheritance tax (IHT) bill of £8,780 if they died after 5 years and payments were not made at the provider's discretion. This IHT liability comes on top of the norma...