What is the double trust structure and why is it important?

The Wealth Preservation Account includes two distinct and separate trusts: (i) The Initial Trust – a bare trust to which you assign legal ownership of the life assurance policies, and (ii) The Settlement – a discretionary trust to which you assign ownership of all beneficial interests in the life assurance policies, whilst retaining the right to receive the proceeds from each of the maturing policies. This unique trust structure is designed to help avoid potential challenges from His Majesty’s Revenue and Customs (HMRC) in respect of gifts with reservation, the general anti-abuse rule and pre-owned asset tax legislation.

Do I need to register the trusts on the Trust Registration Service (TRS)?

Yes, HMRC have confirmed that where the trustees differ on both the initial trust and discretionary settlement, two separate registrations must take place. However, where the trustees are the same on both trusts then only one registration is required. It is important to note that where any change occurs on either trust in the future, which means that there is a difference in the legal or beneficial ownership, such as a trustee change which only impacts one trust, then the trust impacted by the change will need to be registered separately. <a href="/technical-support/trust-registration-service/" title="Trust Registration Service">You can find more details about registering your trust at our TRS hub here </a>

Can the trustees be changed?

You can’t remove a trustee, however, if a trustee refuses to act, or is no longer capable of being a trustee, you can appoint a new trustee in their place. If a trustee wants to be discharged, they can voluntarily retire as long as there will still be two personal trustees, or one corporate trustee, after the trustee retires. If not, then a new trustee must be appointed to meet the required number of trustees. If a trustee dies, then we need proof of the trustee’s death, their death certificate would be evidence of this. Again, if this leaves fewer than two trustees, or one corporate trustee, then a new trustee must be appointed to meet the required number of trustees.

Can the trustees of the settlement make payments to my beneficiaries?

Yes, the trustees of the settlement can instruct the trustees of the initial trust to surrender policies before they reach their maturity date and pay the proceeds to your beneficiaries.

Where can I find out more about the Wealth Preservation Account?

<a href="https://p3.aprimocdn.net/canadalifeuk/wpt-q-as.pdf">Wealth Preservation Trust Q & A</a>

Wealth Preservation Account

Q: Where can I find out more about the Wealth Preservation Account?

<a href="https://p3.aprimocdn.net/canadalifeuk/wpt-q-as.pdf">Wealth Preservation Trust Q &amp; A</a>

Reduce inheritance tax and retain access to optional yearly payments

Our Wealth Preservation Account gives you the best of both worlds – a product that allows you to potentially reduce your inheritance tax liability, while allowing you full access to the trust assets through optional yearly payments. After seven years, your gift into trust moves out of your estate entirely and any investment growth is outside of your estate from day one.

How it works

Is the Wealth Preservation Account right for you?

Option to take yearly payments of the maturing policies, which can be deferred if you don’t need them at the time

Gift is no longer included in your estate for inheritance tax after seven years

Beneficiaries can receive payments while you’re alive

What are the risks?

The value of your investment can go down as well as up and you may get back less than you invest. The way investments performed in the past is not a guide to how they’ll perform in the future. Tax rules depend on individual circumstances and may change. Speak to an adviser, if you need more information on tax.

This trust could be right for you if:

You’re aged between 18 and 89 with at least £50,000 to invest
You want to try to reduce your inheritance tax liability by making a one-off gift to a trust
You want access to the trust through optional annual payments of the maturing policies
You're willing to accept a degree of investment risk to maximise opportunities for capital growth
You want to allow payments to a beneficiary at any time, while you’re alive

The trust may not be appropriate if:

You have less than £50,000 to invest
You want full access to your investment at all times
You might want to add more money to the trust
You want a guaranteed return or cannot accept any investment risk

Need an adviser?

Need an adviser? A financial adviser can help you get a tailored quote for our products. Read up on how to find an adviser and what to expect from the advice process.

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Frequently asked questions

The Wealth Preservation Account includes two distinct and separate trusts:

(i) The Initial Trust – a bare trust to which you assign legal ownership of the life assurance policies, and
(ii) The Settlement – a discretionary trust to which you assign ownership of all beneficial interests in the life assurance policies, whilst retaining the right to receive the proceeds from each of the maturing policies.

This unique trust structure is designed to help avoid potential challenges from His Majesty’s Revenue and Customs (HMRC) in respect of gifts with reservation, the general anti-abuse rule and pre-owned asset tax legislation.
Yes, HMRC have confirmed that where the trustees differ on both the initial trust and discretionary settlement, two separate registrations must take place. However, where the trustees are the same on both trusts then only one registration is required.

It is important to note that where any change occurs on either trust in the future, which means that there is a difference in the legal or beneficial ownership, such as a trustee change which only impacts one trust, then the trust impacted by the change will need to be registered separately.

You can find more details about registering your trust at our TRS hub here
You can’t remove a trustee, however, if a trustee refuses to act, or is no longer capable of being a trustee, you can appoint a new trustee in their place.

If a trustee wants to be discharged, they can voluntarily retire as long as there will still be two personal trustees, or one corporate trustee, after the trustee retires. If not, then a new trustee must be appointed to meet the required number of trustees.

If a trustee dies, then we need proof of the trustee’s death, their death certificate would be evidence of this. Again, if this leaves fewer than two trustees, or one corporate trustee, then a new trustee must be appointed to meet the required number of trustees.

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Adviser Support

How it works

Is the Wealth Preservation Account right for you?

What are the risks?

This trust could be right for you if:

The trust may not be appropriate if:

Need an adviser?

Wealth Preservation Trust Case Study

Tech Talks: Pensions & IHT

Frequently asked questions

What is the double trust structure and why is it important?

Do I need to register the trusts on the Trust Registration Service (TRS)?

Can the trustees be changed?

Can the trustees of the settlement make payments to my beneficiaries?

Where can I find out more about the Wealth Preservation Account?

How to get started

New Customer?

Existing Customer?

Are you an adviser?