Standard Life has launched a new Flexible Reversionary Plan (FRP) for its international bond to help protect it from inheritance tax (IHT).
The FRP is designed to provide clients with estate planning flexibility while permitting variable payments back to them, if needed.
The new trust is available on the Standard Life International Bond, and is the latest development in Standard Life’s ongoing growth in the Offshore Bond market.
The FRP enables clients to gift a Standard Life International Bond into trust while retaining the option to take regular, adjustable payments, known as reversions.
These are noted in the trust deed and become available on future bond anniversary dates, depending on when the client thinks they’ll need funds. However, the reversions can be defeated by the trustees and paid to beneficiaries or deferred to a later year if the client doesn’t need them when the reversion date arrive.
Investment growth in the FRP is also outside of the client’s estate from day one, and after seven years, the value of the Standard Life International Bond falls outside of the estate entirely.
Warren Bright, head of intermediary advised & private clients distribution at Standard Life, said: “As changes to the wealth planning landscape throw previously solid estate plans into question, advisers are looking to ensure clients’ wealth is managed in the most tax-efficient way, and our trusts are designed to support them as they come to terms with this.
“The Flexible Reversionary Plan will help clients manage assets and address IHT issues in a flexible and tax-efficient way.
“Our research suggests advisers are re-evaluating the role that investing offshore may have in client portfolios moving forward*, and offering the FRP exclusively with the Standard Life International Bond demonstrates our ambitions in this market as we continue to grow the Offshore Bond business and maintain our top-three position.”
