The bare gift trust allows investors to make transfers into trust, which are absolute gifts and for inheritance tax purposes the gift is a potentially exempt transfer (PET). The beneficiaries are chosen at outset and cannot be altered at a later date.

The discretionary gift trust allows investors to make gifts into trust and for inheritance tax purposes the gift is a chargeable lifetime transfers (CLTs). This type of trust allows trustees to distribute the trust fund to any beneficiary (whether individually or as members of a class e.g. grandchildren) as they in their complete discretion see fit.

A gift & loan trust allows capital to be moved into a trust so that the investment growth is part of the trust and, therefore, does not form part of the investor’s taxable estate. Because the transaction is made as a loan the investor can use the loan repayments to supplement their income. However, any outstanding loan does form part of the investor’s estate. The trustees can distribute the trust fund to any beneficiary as they in their complete discretion see fit.

A gift & loan trust allows capital to be moved into a trust so that the investment growth is part of the trust and therefore, does not form part of the investor’s taxable estate. Because the transaction is made as a loan the investor can use the loan repayments to supplement their income. However, any outstanding loan does form part of the investor’s estate. The beneficiaries are chosen at outset and cannot be altered at a later date.

The investor assigns the policies making up the Wealth Preservation Bond to the trustees of a bare trust, which is known as the initial trust. Immediately following that, the investor assigns his beneficial interest in the policies to the trustees of a discretionary settlement. For inheritance tax purposes the gift is a chargeable lifetime transfers (CLTs).

The Probate Bare Trust allows investors to transfer policies into trust and have the advantage of avoiding delays in settling death claims because there is no need to obtain a Grant of Representation before the proceeds can be paid. This is the only purpose of the trust and there are no inheritance tax advantages.