Scottish Life International introduces new trust

Scottish Life International has introduced a new trust unique to the retail, IFA and insurance market, enabling the Settlor to make a Potentially Exempt Transfer and establish a flexible trust.

The changes introduced in the 2006 Finance Act in respect of the inheritance tax treatment of trusts have largely negated the use of flexible trusts, as the transfer to the trustees becomes immediately chargeable to IHT where the value exceeds the Settlor> '> s available nil rate band rather than being potentially exempt.

Scottish Life International can once again offer investors an effective way of reducing their IHT liability and at the same giving their trustees the discretion to provide for a wide range of beneficiaries rather than creating absolute entitlements which cannot be changed.

Neil Chadwick, Technical Officer at Scottish Life International commented, "This trust offers investors the opportunity to not only reduce the value of their IHT estate but also the added flexibility of a fully discretionary trust.

"We had intended to make this available at an earlier date, however, we wanted to make sure that it was 2008 Finance Act friendly!"