Gift Plan benefits
Inheritance tax savings
The amount gifted into the plan will fall outside the estate after seven years. And any growth in investments held in the plan will immediately be outside the estate.
If your client dies, payment can be made from the trust to beneficiaries or trustees without any need to wait for probate or confirmation.
This plan allows your clients to select beneficiaries without including this in a will. For more flexibility, a Discretionary Trust or Flexible Trust should be used.
Discussing this plan with your clients can start a wider conversation about estate planning, which could lead to other business opportunities.
How our Gift Plan works
The Gift Plan is simple to set up and operate. It lets your clients make a gift, and allows them to retain some control by acting as a trustee.
Your client will establish a trust and appoint trustees and may nominate beneficiaries too. The gifted assets are then passed to the trust.
A variety of assets can be held by the trust. Trustees decide on the investment strategy of the trust, which can include investing in a bond - either offshore (International Bond) or onshore (Tailored Investment Bond)", and accessing the range of investments available via these products.
Types of trust
With the Gift Plan, your clients can choose the type of trust that works best for them.
Trustee investment powers
The trustees have wide investment powers, including the ability to select non-income producing bonds such as the offshore (International Bond) or onshore (Tailored Investment Bond).
Using investment bonds means that there is no tax liability until a gain is made. This could be if the bond is fully or partially surrendered, or the 5% tax-deferred withdrawal amount is exceeded. This simplifies the tax and accounting responsibilities of the trustees.
More resources for advisers
Money invested is at risk. Tax may change in the future.