HSBC Life (UK) Limited has shown its commitment to supporting the growing need for estate planning with the launch of new tools and resources for advisers. Its own research indicates that while many advisers believe a significant number of their clients would benefit from estate planning, nearly two out of five (38%) of clients have yet to take any action. Less than half (47%) have taken steps to reduce or plan for Inheritance Tax (IHT).
HMRC figures show £2.2 billion was paid in April to June this year which is £0.1 billion higher than the same period last year and for the 2025/26 tax year IHT receipts are projected to hit £9.1 billion3.
HSBC Life (UK) is committed to supporting advisers to further enhance estate planning advice with the launch of a dedicated section on its website and a comprehensive 45-page manual on estate planning. It covers issues including wills and estate planning, intestacy, an overview of IHT, lifetime trusts, life assurance, estate planning products and offers a range of tools and resources. Products which can support estate planning include onshore investment bonds. Using an onshore investment bond as a trust investment can deliver attractive tax deferment and tax management alongside the tax benefits the onshore bond wrapper already offers, HSBC Life (UK) says.
Mark Lambert, Head of Onshore Bond Distribution at HSBC Life (UK) Ltd, said: “Helping clients with estate planning is a vital component of the advice process and has been under more focus following the introduction of the Consumer Duty. Advisers are seeing increasing demand for support from clients and demand is likely to continue to grow in line with IHT receipts.2 We are focused on helping advisers to deliver good outcomes for clients and the new Estate Planning adviser resources and planning manual are part of that ongoing commitment.”
Advisers can download the Estate Planning Manual at https://www.life.hsbc.co.uk/estate-planning/
Onshore bonds offer zero tax on cash dividends at a policyholder level while non-dividend income is taxed at 20%. Capital gains realised within the Bond are subject to UK life fund taxation. This “fund level” taxation treatment of income and capital gains results in a full basic rate income tax credit being available to the investor when a chargeable event arises. This, in effect, means that the policyholder is treated as having already paid basic rate income tax on these gains. Top slicing relief and 5% p.a. tax deferred rules on withdrawals remain. Lifetime transfers by way of assignment without consideration are not taxable events.
The HSBC Onshore Investment Bond, a tax effective medium to long term lump sum investment wrapper, can be accessed with a minimum investment of £25,000 providing the potential for capital growth while still allowing policyholders to make withdrawals from their investment. It also offers access to around 3,800 funds via open architecture.
HSBC Life (UK) Limited does not replicate funds offered by external fund managers. It enables investment in the funds directly, ensuring that consistency of approach across the investment solutions that advisers recommend to their clients.
