What is the IHT treatment of the flexible trust?

For protection policies only

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The flexible trust is subject to the same IHT treatment as a discretionary trust.

The premiums may be covered by an exemption such as the annual exemption or normal expenditure out of income exemption. To the extent that they aren’t exempt, they will be chargeable lifetime transfers.

The trustees are subject to ongoing IHT charges, such as 10 year charges and exit charges. While the life assured is in good health, the value of the trust will generally be nil or negligible.

This information is based on our understanding of current, taxation law and HMRC practice, which may change.

Trusts establish legal rights and entitlements and might have material financial and tax implications for the Settlor, Trustees and Beneficiaries. Aegon UK is not authorised to provide legal advice, so you should take your own legal advice before setting up a trust, to make sure that it meets your requirements. Our trusts have been drafted for use by UK domiciled individuals.