Inheritance tax (IHT) is often described as a problem for the next generation, but for many high-net-worth (HNW) families it is a challenge they must prepare for today. Wealth is frequently tied up in illiquid assets such as prime property, making the sudden need for cash to settle HMRC’s bill a destabilising moment. Families can find themselves forced to sell trophy homes, cherished estates, or valuable investment property in a hurry — often at a discount — simply to raise the liquidity required.

Whole of life policies are a well-established tool to mitigate this risk. Unlike term cover, they pay out whenever the policyholder passes away, creating certainty and liquidity for beneficiaries. But while such policies can ultimately fund IHT liabilities, they do not necessarily remove the short-term pressure on estates or executors. This is where property finance plays a crucial supporting role. Structured lending can give families the breathing space they need to wait for policy proceeds, handle probate smoothly, and avoid selling assets on disadvantageous terms.

The Liquidity Challenge at the Heart of Estate Planning

The reason IHT is such a disruptive force for wealthy families lies in timing. HMRC expects tax liabilities to be paid relatively quickly, often before probate has been fully completed. Yet probate itself can take many months, sometimes more than a year, depending on the complexity of the estate.

This timing mismatch is particularly problematic where wealth is concentrated in property. The UK’s prime property market is not one where assets can always be sold quickly. Even in a buoyant market, finding a buyer for a £5 million townhouse or a country estate worth tens of millions takes time, and the pressure to move fast can lead to fire-sale pricing. In weaker markets, liquidity is even thinner. Families can easily see 10–20% shaved off the true value of an asset simply because they are under pressure to transact.

Whole of life insurance is designed to cover the liability itself, but its payout is tied to the policyholder’s death and the subsequent claims process. Even though these claims are generally paid more quickly than probate allows, there can still be a gap. If the estate cannot access liquidity in that period, lenders become essential partners.

How Whole of Life Cover Supports Property Finance

For lenders, a whole of life policy provides significant comfort. They know that the estate has a guaranteed future payout to help repay any debt. That assurance can change the risk profile of a deal. For example, a private bank might be more willing to extend a bridging facility to cover a £2 million IHT bill if there is evidence that a policy of at least equal value exists.

This creates opportunities for families to use finance proactively, rather than reactively. Instead of scrambling to sell property, they can arrange credit in advance, secured against assets they wish to retain. When the policy ultimately pays out, the lending can be repaid seamlessly.

Crucially, the finance itself can be tailored to the structure of the estate. Facilities might be secured against a single high-value property, or across a portfolio of investment assets. In some cases, lenders will also consider cross-collateralisation, where the existence of the life policy is factored into the underwriting, reducing perceived risk.

Property Finance Solutions That Complement Whole of Life Planning

There are several ways lending interacts with whole of life strategies for HNW families.

Bridging finance is the most immediate tool. Short-term facilities can be arranged quickly, sometimes within weeks, allowing executors to settle HMRC’s demand on time. Because these loans are repaid within a defined window, they pair well with the expectation of an insurance payout.

For families that want more stability, term refinancing may be more appropriate. By refinancing a large asset — such as a London townhouse or a portfolio of buy-to-let investments — capital can be released in a structured way, ensuring liquidity is available whenever needed. The existence of a whole of life policy reassures lenders that the estate has a repayment mechanism beyond asset disposal.

At the ultra-high-net-worth (UHNW) level, private banks often step in with bespoke solutions. These institutions can provide multi-million-pound facilities, sometimes on an interest-only basis, structured around the timing of anticipated cashflows. Their flexibility often extends to dealing with complex ownership structures, such as offshore companies or trusts, where standard lenders may be reluctant.

A Realistic Case Study

Imagine a family with a £15 million portfolio of residential property in Prime Central London. The patriarch passes away, leaving his heirs facing a £6 million inheritance tax bill. While the estate includes a whole of life policy expected to pay out £6 million, the claim process will take several months. HMRC, however, requires payment far sooner.

Without finance, the executors might be forced to put one of the crown jewel properties on the market at a discount, potentially losing millions in value. Instead, by working with a specialist broker, the family secures bridging finance from a private bank, using the portfolio as collateral. The facility covers the IHT bill in full. Once the insurance payout is received, the loan is repaid, leaving the estate intact and avoiding unnecessary losses.

This example demonstrates how property finance doesn’t replace protection or tax planning — it complements it, ensuring that strategies work in practice, not just in theory.

The Broader Benefits for Wealth Transfer

Beyond the obvious avoidance of forced sales, integrating property finance with whole of life policies provides several wider advantages:

• Time to Make Better Decisions: Families can consider how best to manage assets without being rushed.

• Intergenerational Planning: Heirs can inherit assets intact, rather than fragmented by fire-sale disposals.

• Negotiating Power: Executors with liquidity in hand can negotiate from a position of strength rather than desperation.

• Flexibility: Lending facilities can be drawn down only if needed, giving families optionality without immediate obligation.

For HNW and UHNW families, these benefits align with the overarching goal of succession planning: preserving wealth across generations.

How Willow Can Help

At Willow Private Finance, our role is not to provide tax or protection advice — that’s the domain of IFAs and legal specialists. Instead, we focus on the lending piece of the puzzle. With over 20 years of experience advising HNW families, we understand how lenders view estates, insurance cover, and property portfolios.

We work with private banks, specialist lenders, and whole-of-market partners to structure facilities that dovetail with existing estate plans. Our approach is collaborative: we liaise with your legal and tax advisers to ensure the finance solution supports, rather than disrupts, the wider strategy.

Above all, we recognise the emotional dimension. These are not abstract transactions — they often occur during a difficult time for families. Our aim is to make sure property assets are preserved, liabilities are met smoothly, and heirs are not left with avoidable stress.

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