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18/08

Skandia Ireland launches Discounted Gift Trust and Loan Trust services

Skandia Ireland, the Dublin-based hub of Skandia International – the offshore business of Old Mutual, today announces the launch of a Discounted Gift Trust (DGT) and Loan Trust solutions following demand from financial advisers.

18 August 2011

Skandia Ireland, the Dublin-based hub of Skandia International – the offshore business of Old Mutual, today announces the launch of a Discounted Gift Trust (DGT) and Loan Trust solutions following demand from financial advisers.

A recent poll* by Skandia International indicates that according to the surveyed advisers, the greatest need for trust arrangements is to mitigate their clients’ potential inheritance tax liabilities (IHT).

The DGT arrangement provides UK domiciled individuals with the ability to make a gift into trust but retain a life-long right to draw an income stream from that gift. The value of this income stream is discounted against the gift, which has the effect of reducing the amount of inheritance tax that might eventually have to be paid.

A Loan Trust offers an individual 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 would fall immediately outside the individual’s estate and therefore would not become liable to IHT. Both, the unlimited and limited liability options of a Loan Trust are being made available.

The enhanced services further strengthen the suite of inheritance tax solutions available from Skandia Ireland, which already offers Discretionary and Bare Trust services, and are subject to the same standard territoriality restrictions.

Rachael GriffinRachael Griffin, head of product law and financial planning at Skandia International, comments:

”Trusts are very powerful financial planning tools. The feedback received from advisers is not surprising as we have witnessed a growing demand for IHT solutions over the recent years. Investors, especially those that are on the move, but who may still maintain a UK domicile and therefore an IHT liability, are becoming increasingly aware of the need to put in place arrangements to help protect their assets and mitigate, as much as possible, their inheritance tax liabilities. The provision of these additional trust services from our Dublin base will ensure that clients and advisers have flexibility and options when considering wealth planning solutions.”

* The survey looked to understand some of the key aspects that form part of the advice process and was conducted early in 2011, attracting responses from over 330 advisers from around the world – Hong Kong, Singapore, Dubai, UK, Europe, Africa and Latin America.

This press release is for journalists only and should not be relied upon by financial advisers or customers.