With our Loan Scheme your clients can make a loan to a trust ,which is invested in the International Portfolio Bond. Future growth on that investment  won’t form part of  their estate for inheritance tax purposes.  They can ask for repayment of the loan, in whole or in part, at any time.

Loan Scheme

The Loan Scheme allows a person to make a loan to a trust, which the trustees then invest in an International Portfolio Bond. Any future potential growth on the bond will not form part of that person's estate for inheritance tax purposes. The person can demand repayment of the loan, in whole or in part, at any time.

• It provides a potential reduction in the value of the donor/settlor’s estate for IHT purposes.
• There are no IHT charges in setting up the trust
• Any growth on the investment is immediately outside of the donor/settlor’s estate for IHT purposes but the outstanding balance of the loan remains part of their estate
• It gives the donor/settlor the right to demand repayment of the loan at any time
• Repayment of the loan can be made by regular or ad-hoc payments
• Enables the donor/settlor to take regular payments of up to 5% a year of the original amount of the loan without any liability to income tax
• After the donor/settlor’s death, the bond in the trust fund will be held for the benefit of the people named as beneficiaries of the trust, subject to the repayment of any outstanding loan to the donor/settlor’s estate

The value of the bond held within the trust can fall as well as rise and is not guaranteed.