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Lombard International plans to ease IHT burden

Lombard International Assurance is offering a trust plan aimed at inheritance tax mitigation by allowing investors to benefit from a gift donation and to receive income.

The wealth preservation trust is designed to help reduce or eliminate IHT liabilities by discounting capital.

The trust allows the investor to make a gift of capital for IHT purposes. In the meantime, the investor can enjoy access to a preset income stream using tax-deferred withdrawals of up to 5 per cent a year for a specified term.

If death occurs within the first seven years, the value of the original gift can be discounted to reduce IHT liabilities, depending on the investor&#39s health, age and income stream. The value of the gift falls completely outside of the estate after seven years.

To set up the trust, the client applies for a Lombard private client portfolio on the lives of the beneficiaries, indicating the level of fixed income required. The portfolio is then assigned to the trustees of a wealth preservation trust, retaining an entitlement to part surrender withdrawals.

Head of UK sales Stephen Atkinson says: “The wealth preservation trust structure is ideal for IFAs&#39 high-net-worth clients who are looking for a tax-efficient income as well as a scheme to alleviate the threat of inheritance tax. The tax-deferred income may also be an ideal way to supplement retirement provision.”

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