Standard Life announces expansion of trust range

Standard Life has announced the expansion of its trust range with the launch of a Discounted Gift Plan Absolute Trust, giving more choice of trusts for advisers and clients.

A Discounted Gift Plan is designed for people who want to gift money to a trust as part of their estate planning strategy, while allowing fixed regular withdrawals to be paid back to them. If the client dies in the first seven years of setting up the trust, the amount added back into their estate for IHT purposes may be less than the original cheque they wrote, hence the name “discount”, which can reduce IHT. The value of the discount depends on the age, health and sex of the customer as well as the level of withdrawals selected.

With an Absolute Trust the beneficiaries are fixed at outset and cannot be changed by the trustees or added to. This type of trust is therefore popular with those who are certain of their wishes. If adults are named as the beneficiaries, the trust enjoys PET (potentially exempt transfer) treatment for IHT purposes. This means that it is unaffected by the radical changes introduced in Finance Act 2006 and the trust is free of the ten year and exit charges associated with flexible or discretionary trusts.

Commenting on the launch, Julie Hutchison, Standard Life’s Estate Planning Specialist said, “It is nearly a year since Standard Life had to withdraw its trust range following uncertainty around the tax status of gifts to trust immediately after the March 2006 Budget. I am therefore delighted that within 12 months we have not only been able to reinstate our range of trusts but are now in a position to expand the range with the introduction of the Discounted Gift Plan Absolute Trust, bringing additional choice to trust planning.”

The Discounted Gift Plan Absolute Trust benefits from the following features:

It is available with Standard Life’s Capital Investment Bond, Distribution Bond and International Bond

Advisers and their clients will have access to 112 funds through the Capital Investment Bond or 46 funds through the International Bond giving a varied choice of investment options

Extended withdrawal options ranging from 0.5% to 10% will be available to give flexibility to customers

Single and joint settler options will also be available for flexible family financial planning strategies

Another important feature of the Discounted Gift Plan Absolute Trust is the unique opportunity for financial advisers to track trust applications using the Standard Life online business tracking facility. The trust tracking facility is available for bonds and provides a real time status report on the trust application. This is of particular use with Discounted Gift Plan applications where underwriting can be involved. For example, an adviser can check if a GP report has been requested or received, letting advisers retain ownership and control when setting up trusts.