Mr & Mrs Rutland were retired in their early 60s and in a comfortable financial position. They had undertaken some inheritance tax planning at retirement but with an estate of £1.5m they still had substantial surplus capital. They were uncomfortable about gifting further money outright to their children, just in case they later needed it themselves.
After undertaking a review of their position we recommended Mrs Rutland make an investment of £250,000 into a flexible Trust. Once this gift is seven years old, the value of the investment will fall completely outside of her estate and therefore reduce the potential inheritance tax by £100,000. However if at any time, access to the capital is required, she is able to draw on a part of the investment each year and is ultimately able to recover the whole of the value of the Trust over a number of years should it be required. This is unlikely to be the case unless it is needed for spending on care or medical costs but equally, parts of the Trust can be gifted to family members at any time if that is what she chooses to do.
The Financial Conduct Authority does not regulate Trusts or Inheritance Tax Planning.