Dimensions Preference Discounted Trust Account

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

A discounted trust account gift scheme is a way of removing money from your client’s estate and reducing the potential inheritance tax that their beneficiaries will have to pay when they die. The underlying trust also allows them to receive periodic payments from the investment - these payments will be set at outset and can be paid monthly, quarterly, half yearly or yearly to supplement income.

As the underlying investment is held with Canada Life International, based on the Isle of Man, the trustees can benefit from a tax-efficient investment, free of UK tax. Also, the payments received can be paid on a tax deferred basis, usually without any immediate income tax liability.

  • 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.
  • The potential inheritance tax payable when you die will be reduced immediately, with a further reduction after you have survived seven years from the original investment.
  • After you die, 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.
  • Investors can appoint fund advisers on a discretionary or non-discretionary basis, with fees being paid outside of the 5% withdrawal facility.

The Account offers a comprehensive range of investments with over 4,000 unit trusts and open ended investment companies for your and your advisers to choose from. In addition to this, there is the option to include cash deposits from non-UK financial institutions.

The value of investments can fall as well as rise and you should speak to a professional adviser to ensure that any investment is suitable for you.

The Dimensions Preference 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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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.