Capital placed in a Gift Trust falls outside the client’s estate for Inheritance Tax purposes, provided the client lives for at least 7 years. The client has no access to money from the trust. The client would be a trustee of their Gift Trust so would be able to exercise control over how the trust fund is invested and, depending on the type of trust used, also have control over when a beneficiary can benefit from the trust.
A cash sum is loaned to the trust to be invested. Any growth on that investment is outside the client’s estate for Inheritance Tax purposes. The client may take regular repayments of their loan to supplement their income. Upon death, any outstanding loan remains in the client’s estate for Inheritance Tax purposes.
Capital is placed in trust and part of it may fall outside the Inheritance Tax estate immediately. The remaining part should fall outside the client’s estate after 7 years provided the client lives for a least 7 years from the date of the gift into the trust. The client retains access to regular payments from the trust during their lifetime or until the investment runs out.
Onshore investment bonds held in a trust provide a number of potential benefits:
The HSBC Onshore Investment Bond is not designed for non – taxpayers, non – UK residents or short-term (less than 5 years) investors. The value of investments can fall as well as rise and your client may not get back what they invested. For some investments this can also happen as a result of exchange rate fluctuations as shares and funds may have an exposure to overseas markets. HSBC Life (UK) Limited cannot be held responsible for the investment performance of your client’s bond. The value of any tax benefits described depends on individual client circumstances. Tax rules and rates may change in the future. HSBC Life (UK) Limited cannot be held responsible for any future changes in legislation.
HSBC Life has a wealth of Trust experience to share. Our taxation and Trust Manager has over 37 years’ experience dealing with tax and trust matters.rnrnIn addition, HSBC Life has partnered with Technical Connection to help us provide comprehensive support for financial advisers.
Onshore investment bonds held in a trust provide a number of potential benefits:
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