Product Estate Planning Gift Trust 680X392

Gift trust

Pass on your money in a tax-efficient way

How a trust works

A trust is a way of managing assets (such as money or investments). It’s a legal arrangement where someone (the settlor) puts assets into a trust and appoints a person or group of people (the trustees) to look after them, for the benefit of a group of people (the beneficiaries). There are various types of trusts, with different features and benefits.

Our Gift Trust

With this trust, you’ll need to take out one of our investment bonds or whole of life protection plans first and then transfer it into the trust. If the bond or plan is in joint names, then the trust can also be set up in joint names.

Once the trust is set up, you can’t access your investment to make withdrawals. By placing the money in a trust, it moves out of your estate and is exempt from inheritance tax after seven years.

The trust will continue until the investment is given to the beneficiaries.

Accessing your money

With a gift trust, you won’t have access to your investment, so you can’t make withdrawals. For this reason, our Gift Trust is only suitable for those who want to give that money to their chosen beneficiaries.

A bare or discretionary trust?

Bare gift trust

With a bare gift trust you can’t change the beneficiaries, so you’ll need to be certain about who you choose. The trustees will manage the investment until the named beneficiary is 18 years old. Once the beneficiary turns 18, they can manage the investment themselves, withdraw money or even cash it in.

Discretionary gift trust

With this option, the trustees manage the trust at their discretion. This means they can make decisions such as who’ll benefit from the trust, how much money they’ll get and when.

Products that can be placed in this trust

You can use the following investment bonds and protection plans with our Gift Trust.

Investment bonds

Protection plans

Tax

You might need to pay income tax on any money paid out from an investment bond in a gift trust. The person who needs to pay the income tax will change, depending on whether the trust is set up as a bare or discretionary trust. For more information on tax, please speak to your adviser.

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