Royal Skandia Trust Company, a division of Isle of Man-based Skandia International, has extended its range of inheritance tax solutions with the launch of its Enhanced Loan Trust.
Royal Skandia claims the key benefit of this latest enhancement is the flexibility it brings to investors who can now accommodate a future change of circumstances such as waiving all, or part of, any outstanding loan.
With a Loan Trust investors have the ability to make an interest free loan repayable on demand, the proceeds of which are placed in a single premium investment bond, written in trust for chosen beneficiaries. Any growth in the value of the loan falls outside the individual’s estate and is, therefore, exempt from IHT.
Royal Skandia says that with its Enhanced Loan Trust, the trustees will prompt a review of the lender’s circumstances as part of the regular review processes to establish whether the lender wishes to waive all, or part of, the loan to beneficiaries.
Additionally, by exploiting the range of available IHT exemptions such as utilising unused annual allowances and making further gifts of the loan to the beneficiaries’ trust, the ELT plays its part in reducing the lender’s IHT liabilities.
Rachael Griffin, head of product law and financial planning at Skandia International, says, “We recognise that a client's financial situation changes throughout their lifetime. The Enhanced Loan Trust utilises a professional trustee service which will ensure that the client revisits their financial position and, with assistance from their adviser, makes use of inheritance tax exemptions or provides for large gifts to be made with maximum efficiency.”
A recent survey conducted by Skandia International reveals that 60% of offshore advisers identified the key uses their clients have for trusts are mitigation of IHT liabilities, asset protection and control over who would benefit.
By way of a special offer, Royal Skandia has announced the removal of the annual fee of £300 +VAT for the life of any new trust taken out until the 31st December 2011. The offer applies to all new Royal Skandia applications received during this period that have premiums of £200,000 or more where a Royal Skandia Trust Company trust is utilised.
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