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Axa launches new estate planning bond trusts to overcome Budget changes

Axa Isle of Man has launched two versions of its estate planning bond to overcome changes in the 2006 Budget.

These new trusts aim to provide investors with greater flexibility in mitigating inheritance tax liabilities following changes to the tax treatment of some trusts announced by the Chancellor this year.

One of the two trusts is based on a bare trust principle and the other on a discretionary trust platform allowing individuals to place a lump-sum for their dependants into a discounted gift trust which allows them to draw an income from the fund.

The estate planning bond, from Axa Isle of Man also allows investments to be made in a tax-efficient offshore environment. The use of a capital redemption bond rather than a life bond provides further tax planning flexibility.

Axa has also developed a calculator to help advisers decide how much can be invested in the discretionary trust without triggering a tax charge either immediately or at subsequent ten yearly anniversaries.

Axa Isle of Man technical director Graeme Easton says: Following the Budget announcement regarding the taxation of trusts, we felt it was important to address any uncertainty created among individuals and IFAs and ensure that IHT planning was not being put on hold, due to a lack of clarity about the most tax efficient ways to invest. While we are still lobbying for changes to be made prior to the Finance Bill being enacted, we believe that certain parts are unlikely to change so we have written these trusts on that basis.


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