Estate Management Bond
Estate Management Bond
The Estate Management Bond is an offshore insurance bond consisting of a series of non surrenderable unit-linked single premium endowment life assurance policies. The Bond will be divided into identical individual policies and you may elect to have the Bond divided into up to 100 policies of the same amount. The Bond is denominated in Sterling.
The premium will be invested in the permitted investments selected by the Policyholder, the appointed adviser or by the appointed Investment Manager. The value of the investments will dictate the value of the Bond.
The bond aims to:
- To provide capital growth over the medium to long- term.
- To provide the option to take the proceeds of sequential maturing policies from the Bond and the option to extend the maturity dates of those policies.
- To provide a sum assured payable on the death of the life assured.
- To reduce potential inheritance tax liabilities by using a discretionary trust.
Basic Features
| Investments | Collective Investments/UK assets, Discretionary Managers, Platforms. |
| Withdrawals | 1.5% (max) bond value per annum (Professional Trustees and Advisers only) - no other withdrawals are permitted. |
| Death Benefit | Bond Value + £100 |
| Surrender | Not permitted |
| Assignments | Yes, it is possible to assign a maturity benefit to a beneficiary. There is a separate specimen form to enable this. |
| Additional Charges | Adviser fee - 1% (max) value of bond (p.a.) which is deemed a withdrawal and is included in the 1.5% referred to above. |
| Segment Maturities | Series of maturing identical policies. Policies can be deferred by the trustees prior to maturity (new maturity date posted against the maturing policy, same DD/MM) or paid out to the settlor. |
| Charges | Charges will be deducted quarterly on policy anniversary based on the policy value, together with a monetary charge. |
| Policy Currency | GBP |
| Cash Account Minimum | The Cash Account must be kept in credit with a minimum of 2.00% of the value of the Portfolio or with any other minimum value agreed. |
| Advisers | Combination of broker only, adviser (ongoing adviser charge applied) and self advised. |
Further Notes
The discretionary trust used means:
- At outset it is a Chargeable Lifetime Transfer for IHT
- Periodic and exit charges can apply
- Maturities for the settlor are not included for the periodic charge calculation
- Any tax due is usually paid by the settlor as the trustees can’t surrender/withdraw
Pre RDR need to be endorsed to allow withdrawals if Adviser Fees are requested