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 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 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 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 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.

  • The potential inheritance tax payable when you die could 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.

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

  • 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 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 managers.

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 and you should speak to a professional adviser to ensure that any investment is suitable for you.

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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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.