Standard Life is writing to 4,000 advisers to clarify its position on the age of beneficiaries named in absolute trusts.
Following an Association of British Insurers circular issued on January 2, Standard is warning IFAs about the care needed when considering minors as absolute beneficiaries.
Gifts to minors will now be classed as chargeable lifetime transfers rather than potentially-exempt transfers, as they would if the beneficiary were over 18.
Standard says its plans to launch an absolute trust with its discounted gift plan remain unchanged but it has added warnings to its literature highlighting the issue. It will telephone advisers to confirm the status of pipeline business.
Head of estate planning Julie Hutchison says clear guidance on the impact on retrospective business cannot be given until the Revenue’s final guidance note is published.
She says: “This is not necessarily a bad thing. I think it gives a new interpretation on something HMRC has never taken a view on before. It flags the opportunity to consider a flexible or discretionary trust rather than an absolute trust, of which I am much more of a fan.”