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

The Premiere 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 they utilise the tax deferred allowance from an investment bond, there is usually no immediate tax liability.

The capital value of the regular payments, called the discount, is outside of the client’s estate immediately with the balance of the investment 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 Account is available on a life assurance basis, linking the bond to the death of the last surviving life assured, or on a capital redemption basis with a fixed term of 99-years, removing the need to select lives assured.

  • The tax efficient growth of an investment based on the Isle of Man means that for a UK resident any growth achieved in the Account is not subject to UK tax, although it may apply when any profit is brought back into the UK.

  • Available as a life assurance bond that will end on the death of the last surviving life assured or as a capital redemption bond with a 99-year term.

  • 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 choose.

  • The Account can be denominated in one of a choice of currencies; Sterling, US dollars and euro.

  • There is a choice of charging options offering flexibility for different clients.

  • The ability to use multiple investment solutions at any time, allowing investors to mix and match between funds, cash deposits, discretionary managers and investment platforms.

  • Investors can appoint fund advisers on a discretionary or non-discretionary basis, with fees being paid outside of the 5% tax deferred allowance.

 

The Account is true open architecture – this means that almost any collective fund from around the world can be used, as can cash deposits and any of the 40 or so investment platforms or 150+ discretionary managers that we already have agreements in place with. The list of platforms and discretionary managers is always evolving and being added to.

It is possible to use multiple funds, platforms and discretionary managers and the investments can be changed at any time.

The value of investments can fall as well as rise.

The Premiere Discounted Trust Account will appeal to UK resident investors with at least £50,000 to invest 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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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.