Scottish Life International (SLI) is to launch a modified probate trust which will be available to i...
Scottish Life International (SLI) is to launch a modified probate trust which will be available to international investors after the Finance Bill becomes law in late July.
Gerry Brown, technical manager at SLI, said while transfers to a traditional probate trust would soon be subject to inheritance tax (IHT) following the Government's announcement earlier this year that it would fall under the discretionary trust regime, it was still possible to use a trust to avoid probate.
He explained: "We have taken legal advice and are drafting a new version of the structure. We hope to provide draft clauses for wills enabling bonds to be passed to surviving spouses/civil partners in such a way as to maintain the current inheritance tax spouse/civil partner exemption. It is also possible to avoid probate by using jointly owned bonds and we will be providing advisers with planning ideas based on this approach."
Brown said probate trusts were not designed to mitigate IHT but to avoid the lengthy process of obtaining probate and was surprised at the Government's decision to include these in its trust changes.
He added: "Probate trusts and other approaches to avoid probate can save investors thousands. If an individual has assets in different jurisdictions their executors can incur significant legal costs taking ownership of assets. It might be necessary to appoint legal advisors to do the work in each jurisdiction. These trusts are not being used to avoid IHT, but to avoid probate."
SLI planning to launch revamped probate trust
Structure will provide draft clauses in will so bonds can be passed to surviving spouse
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