Trevor Matthews, chief executive, Standard Life Assurance Limited, the Life & Pensions arm of the Standard Life group in the UK & Europe said:
“We are delighted to be in the position to reinstate the Discounted Gift Plan. Like many providers, Standard Life initially suspended its trust range earlier this year after a Budget announcement created uncertainty around the tax status of gifts to trusts. We have now had clarification from HM Revenue & Customs on how the Finance Act applies to our Discounted Gift Plan and the re-launch will mean business as usual for advisers and their clients in this extremely important area of estate planning.”
The re-launch of the Discounted Gift Plan will restore much needed flexibility to estate planning. With the Plan clients retain the right to payments for life and the Plan takes the original gift out of their estate after seven years. If the client dies within 7 years, HM Revenue & Customs may agree that a reduced amount is included in their estate for IHT calculations. Growth in the bond is taken out of the clients’ estate immediately.
The Discounted Gift Plan also benefits from the following features:
• The DGP will be available with Standard Life’s Capital Investment Bond, Distribution Bond and International Bond
• Advisers and their clients will have access to 112 funds through the Capital Investment Bond or 46 funds through the International Bond giving a wide and varied choice of investment options
• Extended withdrawal options ranging from 0.5% to 10% will be available to give flexibility to customers
• Single and joint settler options will also be available for flexible family financial planning strategies
Julie Hutchison, Estate Planning Specialist at Standard Life said:
“We believe that now is the right time to re-enter the market but, naturally, there is still some confusion in the minds of professional advisers and their clients following the budget. As part of the re-launch of the Discounted Gift Plan we aim to help advisers understand the new IHT rules by providing a full range of support materials including case studies, a Q&A document and a trust decision tree. We want to help advisers in becoming comfortable operating with the new rules so they can add value to the advice they give their clients. The time has never been better to look at the DGP and we have a one-page summary which sets out exactly why advisers should now be considering the DGP with their clients.”
Another important feature of the DGP is the unique opportunity for financial advisers to track trust applications using the Standard Life online business tracking facility. The trust tracking facility is available for bonds and provides a real time status report on the trust application. This is of particular use with Discounted Gift Plan applications where underwriting can be involved. For example, an adviser can check if a GP report has been requested or received, letting advisers retain ownership and control when setting up trusts.
