investment bond "written in trust"

In message , snipped-for-privacy@hotmail.com writes

Subject to the gift into the trust being at least seven years before last death and no other Chargeable transfers in the seven years before, then yes.

If it is an onshore bond then no.

pretty much what the words 'potential' and 'intended' mean. The list of potentia,l beneficiaries is a list of beneficiaries or classes of beneficiary from which the trustees can select who they may decide to give the dosh to.

Similar except the 'in default of appointment' type MUST be the beneficiaries if the Trustees dont appoint any others.

Be aware that the creation of most types of new trusts are now chargeable lifetime transfers for Inheritance Tax and can have immediate and ongoing consequences for IHT.

Thanks John... The investment bond trust were setup some 20+ years ago - so we should be ok regarding not being part of the estate, and no tax...

Interesting what you say regarding beneficiaries... With potential / intended beneficiaries - so can the trustees pay out to someone on the "potential list" and not on the intended list? And vice-versa (not pay out to someone on the intended list ... or could they even go so far as to make a beneficiary someone totally differenct to those stated....(I presume not)?

Is there a legal process by which trustees change who are the beneficiaries (assum> In message ,

the trust being at least seven years before

'potential' and 'intended' mean. The list of

type MUST be the

In message , snipped-for-privacy@hotmail.com writes

This isnt a 'get out' by me! It all depends on the wording of the trust deed.

I would expect the trustees to be empowered to exclude someone from the intended list.

All that is needed is a minuted meeting of trustees.

Thanks ... it never rains but it poors... My mother is just diagnosed terminally ill and has asked me to look into getting her finances in shape ... it looked as if estate was going to be under the exempt limit ... but I have discovered some shares which were left to her by my late father ... If I do nothing I think these will get hit @ 40% IHT ... obviously there is not enough time for them to be given as a PET ... but is there any other way of minimising tax at this late stage (eg any advantage in putting them in trust for grandchildren)? I'm looking for ideas ... but will shortly need to get professional advice ... which profession... solicitor, accountant or IFA? thanks AJ

What sort of amount of money are you looking at ? There are various annual gift limits which might cover smaller amounts. There are also schemes that might be worth looking at for larger amounts.

Which companies are the shares in ? Some AIM /EIS/VCT (s) are IHT exempt.

How long ago did late father pass away - it is (often) possible to back date changes to a will (I think for 2 years) and give them to someone else instead.

Is mum likely to last until next tax year ?

£50k

Blue chip

quite a few years

never can tell - but unfortunately pretty unlikeley

AJ

50k

My guess is that when the experts wake up they might suggest looking at life assurance policies written in trust.

Blue chip

I would suggest doing a calculation to see how much/many can be sold before CGT becomes payable. - That might limit your options.

In message , Miss L. Toe writes

I cant see how this would help if she is near death.

I cant see how this would help. Once sold the sale proceeds would remain subject to IHT in due course.

In message , snipped-for-privacy@hotmail.com writes

It will only be the bit that takes the total estate over the threshold that will be taxed @ 40%.

Sadly, if the estate is>£285k and life expectancy is very short, i.e. less than 4 years, then there is not much that can be done. PETs and Discounted Gifts wouldnt work.

Suggest that she gives away as much as the normal annual gift allowances will allow.

I did say that I wasnt an expert :-)

I didnt know that there were 'near death' rules.

It would avoid the OPs mum selling all the shares paying CGT and then paying IHT on what is left.

In message , Miss L. Toe writes

:-)

What I meant was that as we know the woman is sadly terminally ill, then obtaining life insurance is likely to be out of the question.

It would make no difference, she may as well stay invested and just wait for death.

I thought there was a scheme whereby one paid say 50k in premiums to obtain

48k in life assurance cover written in trust to be paid direct to a beneficiary thereby avoiding/evading IHT ?

Maybe it has now been outlawed.

In message , Miss L. Toe writes

Yes, but that would still be a Potentially Exempt Transfer or a Chargeable Lifetime Transfer because despite it being pure life cover it has a value in so far as somebody could buy it, albeit at a discount, in the certain knowledge of getting £48k pretty soon.

No, but they have introduced the concept of it having a value