We need to talk about Section 72

By Brian Whelan QFA · 3 November 2026

We spend years building a life for our families. A home. Savings. Perhaps a business. We want the next generation to benefit from that work, without a large inheritance tax bill forcing difficult decisions at an already difficult time.

That is why we need to talk about Section 72. It gives you a practical way to prepare for your beneficiaries’ inheritance tax, with a separate insurance fund to pay it. And, as the example below shows, the effective cost to your estate can be considerably less than the tax bill itself.

The emotional benefit: one less worry for your family

Inheritance planning is about people. It is about giving your children choices, protecting what matters to the family and making your wishes easier to carry out.

A home may be far more than an asset on a spreadsheet. A business may provide somebody’s livelihood. Knowing there is money set aside for the tax can help your family focus on the decisions that matter to them, rather than how to raise a large sum.

It also gives you something useful now: the peace of mind that comes from having a plan. You have thought about the problem, involved the right people and put a solution in place.

The practical benefit: money ready for the bill

An estate can be valuable without containing much cash. Property, land and a business cannot always be turned into money quickly or conveniently.

Section 72 life assurance provides a separate fund on death to meet the beneficiaries’ Capital Acquisitions Tax, usually called CAT. It can help them keep inherited assets instead of having to sell or borrow to pay the tax.

For a married couple leaving everything to each other, joint-life second-death cover fits the point at which the need arises. Transfers between spouses are exempt from CAT. The policy pays on the second death, when the estate passes to children or other beneficiaries. The spouse exemption also applies to civil partners.

Read why joint-life second-death cover makes sense for Section 72.

The financial benefit: prepare gradually, at a lower effective cost

You do not have to leave the entire tax bill to be paid from your estate. You can pay regular premiums during your lifetime for insurance that provides the money when it is needed.

There are two parts to the benefit:

• The policy provides the agreed cover. The premiums in this example fund a €600,000 payout.
• The money spent on premiums is no longer sitting in the taxable estate. At a 33% CAT rate, every €1 used for premiums reduces the inheritance tax on that money by 33 cent, where it would otherwise have formed part of a taxable inheritance.

That second benefit is why we show both total premiums paid and the effective cost to the estate. The effective figure includes the inheritance tax saved on those premiums.

A real quotation: both aged 55 next birthday

This example is a joint-life second-death policy for a male aged 55 next birthday and a female aged 55 next birthday, both non-smokers. It provides €600,000 cover for a guaranteed premium of €705.64 a month for life.

The same quotation is shown at two points: the second death at age 83, and at age 100. These are the payment periods in the illustrated quotation.

The illustration uses 338 monthly payments to age 83 and 542 to age 100. Effective cost is total premiums less the 33% inheritance tax saving on those premiums. It assumes that the premium money would otherwise remain in the taxable estate and the €600,000 policy proceeds are used to settle the beneficiaries’ CAT bill.

With a policy or without one: the difference for the family

In the age-83 example, the tax bill is €600,000 either way.

Without Section 72: the beneficiaries need €600,000 from the estate or another source. If the estate does not contain enough cash, they may need to sell assets or arrange finance.

With Section 72: the policy provides that €600,000. The effective cost to the estate of putting it in place has been €159,799.23.

That is the point of the comparison. You have prepared for the same bill, while leaving more value for the people you want to help.

See the full premium and estate-cost calculation.

But we are planning for an unknown date

We know your family and assets today. We can calculate a likely tax liability using today’s rules. We do not know the date of the second death, the value of the assets then, or the thresholds and tax rate that will apply at that time.

That does not make planning pointless. It makes a sensible starting point and regular reviews important.

We begin with the information available: your estate, who will inherit, any previous gifts or inheritances, and the cover you can comfortably afford. We then review the position as family circumstances, asset values or tax rules change.

The figures above use today’s 33% CAT rate. They are a clear way to understand the benefit on those assumptions, rather than a forecast of future tax legislation.

Why have the conversation at 55?

For many people, their fifties are a natural time to think about the next generation. Children are growing up, a business may be changing hands and the estate is taking shape.

Your age and health affect the cost and availability of life cover. Starting the conversation while you are in good health gives you the opportunity to explore the options and decide what works for you.

The premium also needs to fit your life. A useful estate plan protects your family’s future while leaving you able to enjoy your own money today.

Bring the family plan together

A policy works best as part of a joined-up plan. Your will explains who inherits. Your tax calculation identifies the likely bill. The policy provides a fund for it. The trust arrangements identify the people responsible for handling that fund.

Talk to the people involved. Keep the paperwork somewhere they can find it. Make sure both partners understand the plan, and review it after major family or financial changes.

Our plain-English trust-form guide explains trustees, appointers and the practical steps.