Who is the settlor of the Relevant Life trust?
For protection policies only. This information is for financial advisers only. It mustn't be distributed to, or relied on by, customers.23 October 2019 Back to results
The employer will generally be the initial settlor of the trust, when they take out a Relevant Life policy for an employee, place the policy in trust and make the policy payments.
For tax purposes, the person making the policy payments will also be a settlor. As our Relevant Life trust is flexible, there are various continuation options available if the employee (insured person) leaves the employer who is paying for the Relevant Life policy. This includes the employee (insured person) taking over the policy payments themselves. If they choose this option, the trustees will need to complete a Deed of Removal of Beneficiary to remove the employee (insured person) as a potential beneficiary of the trust to help make sure that the trust continues to be inheritance tax effective.
Your guide to our Relevant Life trust(Opens new window) provides more information about the options available when the employee (insured person) leaves the employment of the employer funding their Relevant Life policy.
This information is based on our understanding of current taxation law and HM Revenue & Customs (HMRC) practice, which may change.
Trusts establish legal rights, obligations and entitlements and might have material financial and tax implications for the settlor, trustees and beneficiaries. Aegon UK isn't authorised to provide legal or tax advice, so you should take your own legal and tax advice before setting up a trust, to make sure that it meets your clients' requirements. Our trusts have been drafted for use by UK-resident and UK domiciled individuals.