Suffolk Life has launched a ‘bypass trust’ designed to help advisers and investors with inheritance tax planning.
The aim of a bypass trust is to reduce the overall impact of IHT on a pension member’s beneficiary. While pension death benefits are usually paid IHT-free, they risk being hit with an IHT charge on the beneficiary’s death.
By putting the funds in a bypass trust the IHT liability can be reduced when the beneficiary dies.
Suffolk Life head of marketing and proposition Greg Kingston says the trust, which is offered as standard with the firm’s Sipp products, has been launched in response to demand from advisers and wealth managers.
He says: “Providing a bypass trust complements our range of Sipps and will provide a valuable option for those advisers looking beyond a pension as solely a vehicle for an individual’s retirement.”
Chase de Vere head of communications Patrick Connolly says: “The primary factors that differentiate Sipp providers are flexibility and charges, but it is also important for the big players to offer an all encompassing solution for advisers.
“Given there has been demand for this from advisers it is sensible for Suffolk Life to offer a bypass trust as standard.”