Having been told by international advisers that almost half of all trust cases written are used to mitigate IHT, Skandia has responded with the launch of its Limited Liability Loan Trust for personal trustees.
Such loan trusts are used by financial advisers as an IHT solution for freezing an IHT liability whilst maintaining access to the capital. With such a trust arrangement the individual has 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 the chosen beneficiaries. Any growth in the value of the loan falls immediately outside the individual’s estate for the benefit of the beneficiaries. What’s more, there is no requirement to survive for any period of time. As the interest free loan is n...
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