Scottish Life Int launches new trust

Scottish Life International has unveiled a new trust which will allow the Settlor to make a Potentially Exempt Transfer and establish a flexible trust.

The changes introduced in the 2006 Finance Act in respect of the IHT treatment of trusts largely negated the use of flexible trusts. This is because the transfer to the trustees becomes immediately chargeable to IHT where the value exceeds the Settlor's available nil rate band rather than being potentially exempt.

However, through the new trust, Scottish Life International can offer investors an effective way of reducing their IHT liability and at the same giving their trustees the discretion to provide for a wide range of beneficiaries rather than creating absolute entitlements which cannot be changed.

Neil Chadwick, technical officer at Scottish Life International, says: "This trust offers investors the opportunity to not only reduce the value of their IHT estate but also the added flexibility of a fully discretionary trust.

"We had intended to make this available at an earlier date, however, we wanted to make sure that it was 2008 Finance Act friendly."

IFAs who would like further information can contact their regional sales manager through Scottish Life International Sales Support (Tel. 01624 681 531 or email salessupport@sli.co.im).