The company, which is the Dublin-based hub of Skandia International – part of Old Mutual, said a recent poll it conducted of 330 advisers from around the world, indicated that the greatest need for trust arrangements is to mitigate their client’s potential inheritance tax liabilities.
Rachael Griffin, head of product law and financial planning at Skandia International, said: “Trusts are very powerful financial planning tools. The feedback received from advisers is not surprising as we have witnessed a growing demand for IHT solutions over the recent years.
“Investors, especially those that are on the move, but who may still maintain a UK domicile and therefore an IHT liability, are becoming increasingly aware of the need to put in place arrangements to help protect their assets and mitigate, as much as possible, their inheritance tax liabilities.”
The DGT arrangement provides UK domiciled individuals with the ability to make a gift into a trust but retain a life-long right to draw an income stream from that gift. The value of this income stream is discounted against the gift, which has the effect of reducing the amount of inheritance tax that might eventually have to be paid.
A Loan Trust, meanwhile, offers an individual the ability to make an interest free loan repayable on demand, the proceeds of which are placed in a single premium investment bond written in trust for the chosen beneficiaries. Any growth in the value of the loan would fall immediately outside the individual’s estate and therefore would not become liable to IHT. Both an unlimited and limited liability loan trust option are being made available by Skandia.
