Gift Trust

The Gift Trust from Prudential and Prudential International can be used to make a gift of an investment or a life assurance policy intended to meet an inheritance tax (IHT) bill. It should be considered only where the client does not want any access to, or benefit from, the trust fund.

Gift Trust with a bond

• Payments can be made to the beneficiaries at any time (as long as the client doesn't benefit at all).
• Choice of onshore and international bonds, offering access to the fund management skills of the Prudential Group and other leading investment managers.

Gift Trust with a life policy

• Can be used to fund a potential IHT liability.
• Option to increase cover if new legislation increases the IHT liability (with increased/additional premiums).
• Choice of single or regular premium policies.
• Policies offered by Prudential International.

The Gift Trust can be written as either an absolute trust or a discretionary trust. With an absolute trust, neither the beneficiaries nor their share of the trust can be changed once the trust has been set up, but the proceeds will be completely free of IHT if the client survives for seven years. With a discretionary trust, the trustees can pay the benefits to anyone, but there may be immediate, periodic and exit tax charges and there are also reporting requirements.

For more information, please use the literature links.

The above is based on our understanding as at March 2011 of the current taxation, legislation and HM Revenue & Customs practice, all of which are liable to change without notice. The impact of any taxation (and any tax reliefs) depends on individual circumstances.

Subject to terms which are available on request.