Delta Discounted Trust Account

For your clients who want an income and to reduce their inheritance tax liability

Investing money into a trust can sometimes mean that the client loses access to the income that a lump sum can offer and in some instances this income may be valuable, for example if it is supplementing income later in life.

The Delta Discounted Trust Account from Canada Life International allows your clients to invest a lump sum of money and to receive regular payments from the trust. These payments can be made monthly, quarterly, half-yearly or yearly depending on the client’s circumstances, and as these payments utilise the tax deferred withdrawal facility from an investment bond, there is usually no personal immediate tax liability.

The capital value of the income scheme, called the discount, is outside of the client’s estate immediately with the balance of the payment being a chargeable lifetime transfer or a potentially exempt transfer depending on what type of trust is used. This means that the whole investment can be outside the client’s estate after seven years and the growth is outside from outset.

The Delta Discounted Trust Account offers a low cost solution with a selected range of over 150 offshore life funds.

  • The tax efficient growth of an investment based on the Isle of Man for a UK resident means that any growth achieved in the Account is not subject to the UK tax regime.  Tax may apply when any profit is brought back into the UK.
  • After the settlor dies the value of the trust will be available. Depending on the type of trust used the trustees can pay these funds out to the chosen beneficiaries or maintain the trust and pay out benefits as and when they chose.
  • A choice of charging options offering flexibility for different clients.
  • Investors can appoint fund advisers on a discretionary or non-discretionary basis, with fees being paid outside of the 5% withdrawal facility.

The fund range available includes over 150 life funds managed by Canada Life’s own award winning investment team and other well-known and respected investment companies such as Jupiter, Investec, M&G and so on.

The funds being invested in can be changed at any time without charge.

The value of the plan can go down as well as up and the client may not get back the full amount they invested.

The Delta Discounted Trust Account will appeal to UK investors who want to combine a tax-efficient investment and reduce the inheritance tax liability on their estate whilst receiving regular payments to supplement their income.

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"Deanna realises that she doesn’t have sufficient pension income and was planning to work until she was 70, however, she has inherited £200,000 from her father."
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This website is for UK professional advisers only and is not approved for use by private customers.

Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised and regulated by the Financial Conduct Authority.