If you’ve maxed out your pension and ISA contributions, how else can you invest tax efficiently?
Private Placement Life Insurance
PPLI sounds like a dream come true because of its tax advantages. I wonder if the same kind of product is available in the UK?
It seems not. From the lack of information available and the previous link indicating that things are looking up for the UK and European Private Placement Market, I don’t think you or I can go out and buy one of these things today. However, this Wikipedia article mentions offshore PPLI solutions being widely used in Europe.
My guess is that PPLI is possible in the UK – but you need enough cash to make it worthwhile investigating the whole offshore malarkey. It appears that the situation is similar in the US where only high net-worth individuals can access these kinds of policies directly.
That’s a shame, but it’s important to remember that this is a potential solution only if you’ve maxed out your annual pension contributions (£40K) and your ISA contributions (£15K). These should be your first tax-efficient investment choices.
The Teachers Insurance and Annuity Association of America offers PPLI-like policies to individuals who otherwise wouldn’t have access to them. Do we have an equivalent in the UK? Again, it seems not.
I’ve asked Teachers Assurance if they know of anything similar – and I’ll update this post when and if I hear back from them.
Unlike a will, a living trust may come into effect in one’s lifetime. A living trust can also avoid the time and cost associated with the probate period of a will, meaning that assets can be transferred relatively quickly and easily after one’s death.
For a DIY approach in the UK, Law on the Web is a good place to start. The Get Your Shit Together site quoted in the book also looks good. For a more hand-held approach, Your Wealth has some good information.
Whatever route you take, thinking about estate planning sooner rather than later makes sense to me.