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Trusts and life assurance

Graeme Davidson, Technical Support Specialist at Bright Grey

Trusts can play an important role in life assurance and inheritance tax planning. So it’s important to be aware of the main types of trust we use in the financial services industry and how they’re taxed under current legislation.

The most commonly used are absolute or bare trusts and discretionary trusts.

Let’s look at each of these in turn.

A valuable addition to the Zurich Intermediary Platform

With the addition of Zurich Investment Life Cover, Zurich can help link a valuable protection plan to clients’ portfolios.

Zurich believe the plan could provide extra peace of mind to clients who are considering investing in the stock market but are worried about exposing what could be a substantial proportion of their assets to market volatility.

Exclusive Purchased Life Annuity (“PLA”) with return of fund on death

Westminster Purchased Life Annuity "Purchased Life Annuities have just got better"

Increasing Certainty On Capital

Stock market performance in 2013 was strong with the FTSE-100 enjoying its best year since 2009 gaining 14.4% and forecasters are now predicting it will break its all-time record of 7,000 and push on throughout 2014.

But advisers will be well aware that one year of strong performance on the stock market is not enough to deliver certainty for pension savers and that the risks of volatility to clients’ capital remain very real.

Direct Offer GPPs & Auto Enrolment

As touched on in one of last month’s Updates, using an existing GPP as an AE qualifying Workplace Pension may need alteration to any initial documentation for new members where Direct Offer has been used in the past. This route is no longer applicable under AE.

Most GPP providers have AE appropriate templates for new entrants for use by the employer or existing paperwork will need editing.

Existing scheme members will also need to be included in any general AE announcements by the employer: this is required by the Pension Regulator under “communicate to all your workers”.