Estate Planning

Our Discounted Gift Plan is designed for clients who want to reduce the value of their estate and potential Inheritance Tax (IHT) liability but want to continue to receive fixed withdrawals from these assets during their lifetime.

Discounted Gift Plan may:

• Immediately reduce value of estate – if discounted, the value of the gift for IHT purposes can be less than the amount invested.
• Reduce IHT liability - the amount gifted into the Plan will fall outside the client’s estate after seven years. Any growth in the investments held in the Plan will be outside the client’s estate immediately for IHT purposes.
• Receive fixed withdrawals for life or until the fund is used up.
• Give faster payments after the settlor(s) death, payment can be made to trustees without the need for Probate or Confirmation.

How it works

The Discounted Gift Plan is easy to set up and to operate. It lets clients make a gift and allows them to take fixed withdrawals from the investment for their lifetime or until the fund is used up. The value of the gift can be ‘discounted’ resulting in a lower IHT liability if the client dies within the first seven years. The client establishes a trust, appoints trustees, and may nominate beneficiaries. The gifted assets are passed to the trustees. who use the money to purchase a Wrap International Portfolio Bond or the Onshore Bond for Wrap.

Lifetime access to withdrawals

To satisfy the rules of the trust, the client must take regular, fixed withdrawals from the Plan for the rest of his or her life, or until all the fund is used up. The maximum annual withdrawal is 10% of the amount invested depending on the type of bond selected. While the client is alive, no other beneficiaries can benefit from the Plan.

Discounting the gift

Any discount is subject to satisfactory underwriting considering the age and state of health of your client and can place a discounted value on the gift. This is done to estimate the market value of the retained rights of the person who created the trust. The health evidence is used to establish the ‘discount’ that will apply. The discount figure is not guaranteed and HMRC may reduce the figure.

Age limits

Clients must be no younger than age 50 and have more than six months until their 90th birthday to apply.

Want to know more?

You can find out more about using a discounted gift trust, including trust options.

Download Discounted Gift Plan Absolute Trust form

Download Discounted Gift Plan Discretionary Trust form

Download Discounted Gift Plan Flexible Trust form

Overview

Our Gift Plan is designed to help your clients reduce their Inheritance Tax (IHT) liability by making a gift.

Gift Plan may:

• Reduce IHT liability - the amount gifted into the Plan will fall outside the client’s estate after seven years. Any growth in the investments held in the Plan will be outside the client’s estate immediately for IHT purposes.
• Give faster payments to beneficiaries after the death of the person who created the trust, there is no need to wait for probate or confirmation before payments can be made from the trust.

How it works

The Gift Plan is easy to set up and to operate. It lets clients make a gift and allows them to retain some control by acting as a trustee. The client establishes a trust, appoints trustees, and may nominate beneficiaries. The gifted assets are passed to the trust. A variety of assets can be held by the trust including cash. Trustees decide on the investment strategy of the trust which can include Wrap Personal Portfolio, Wrap International Portfolio Bond, or the Onshore Bond for Wrap.

Trustees' investment powers

The trustees have wide investment powers. For example, they can select non-income producing bonds – so no taxable income arises in the trust until the bond is cashed in, simplifying the tax and accounting responsibilities of the trustees.

Download Gift Plan Absolute Trust form

Download Gift Plan Discretionary Trust form

Download Gift Plan Flexible Trust Form

Our Loan Plan can help your clients reduce their Inheritance Tax (IHT) liability without giving up access to assets.

Loan Plan may:

• Reduce IHT liability - any growth in the investments held in the Plan will be outside the client’s estate immediately for IHT purposes.
• Allow the client to retain access – as this is a loan and not a gift it can be repaid by regular payments from the Plan or on demand.
• Give faster payments after the settlor(s) death, payment can be made to trustees without the need for Probate or Confirmation.

How it works

The Loan Plan is easy to set up and to operate. The client does not give up access to cash – it is merely loaned to the Plan. The client will automatically be a trustee so also has control over the way the trust assets are invested and dispersed. The client establishes a trust, appoints trustees, and may nominate beneficiaries. The client makes a loan to the trustees who use the Loan to purchase a Wrap International Portfolio Bond or the Onshore Bond for Wrap.

Repayment of the loan

The loan is typically repaid at a rate of 5% a year over 20 years. Your client can demand repayment of the outstanding loan at any time.

Want to know more?

You can find out more about using a loan trust, including trust options.