Plan for UK Inheritance Tax

 

 

There are a number of packaged trust arrangements that can help a large number of individuals UK Inheritance Tax Planning.

These are offered by various financial institutions. Some examples are:

• Discounted Gift Trusts - These are designed for people who do not need access to their capital and want to pass it to their families free from Inheritance Tax, but want to retain the right to draw a regular income.

  The Discounted Gift Trust works by making a gift into a single premium insurance bond for your chosen beneficiaries, fixing the level of income you want to draw until your death.

  The gift is a Potentially Exempt Transfer so if you survive seven years the insurance bond does not count as part of your estate.

• Loan Trust - These are designed for people who want to retain the right to draw on their original capital as well as income.

  You (Settlor) make a loan payment to the trust. The trust then pays back the loan, usually in monthly instalments over 20 years.

  Any growth from investments within the trust is immediately outside the estate for Inheritance Tax planning purposes. The outstanding loan amount would form part of your estate for Inheritance Tax planning purposes.

  On death the outstanding loan can be assigned to your beneficiaries or the loan called in and the monies distributed in accordance with the terms of your Will.