Premiere Europe 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 Premiere Europe Discounted Trust Account (the ‘Account’) from Canada Life International Assurance (Ireland) allows for your clients to invest a lump sum of money and to receive regular fixed 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 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 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 in Ireland 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.
  • The Account can be denominated in one of a choice of currencies; sterling, US dollars and euros.
  • 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.
  • The use of a provider based in Ireland allows for beneficial VAT treatment on discretionary manager fees.
  • Investors can appoint fund advisers on a discretionary or non-discretionary basis, with fees being paid outside of the 5% withdrawal facility.
  • As a life assurance policy, the individual policies can be gifted to other people without a tax charge.

The Account is true open architecture – this means that almost any collective fund from around the world can be used, as can cash deposits, investment platforms or discretionary investment managers.

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

The list of platforms and discretionary managers is always evolving and being added to.

The value of investments can fall as well as rise.

The Premiere Europe 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 fixed 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.