The Future Benefit Trust allows the investor to make a gift into the trust, while remaining entitled to a series of payments, if he or she is still alive on specified future dates.
This is made possible by investing in either a Friends Provident International capital redemption or whole of life offshore investment bond, which is issued as a series of identical policies up to a maximum of 100. The bond is then assigned to the Future Benefit Trust.
A key outcome for the investor is the mitigation of inheritance tax, if they die prior to the specified future entitlement dates.
Irvine Baxter, FPI’s regional sales director, UK, said: “There are very few players in the market with a similar offering and the trust set up will be unique to Friends Provident International."
He added that advisers are being provided with a full set of supporting material, including case studies, to help them when explaining the features of the trust to clients.
Brendan Harper, FPI’s technical services manager, said the product was backed with full counsel approval and sits within the "tried and tested methods of financial planning".
Harper also pointed out that charges are not loaded on to any one segment.
Discretionary trusts can take the form of gift trusts, loan trusts, discounted gift trusts or flexible reversionary interest trusts.
The Future Benefit Trust is a flexible reversionary interest trust which FPI states has been specifically designed to enable investors to:
- Remove growth and capital from their estate, taking IHT planning a step further than the loan trust, which initially removes the growth only
- Have the flexibility to choose at outset, when they receive capital entitlements from the trust, rather than being committed to a discretionary gift trust’s fixed income stream
- Receive a potential discount for IHT purposes on the transfer into the trust
- Top up their initial investment
