The Loan Scheme allows a person (the donor/settlor) to make an interest free loan to a trust, which is invested in a bond. Any future potential growth on that investment will not form part of that person's estate for inheritance tax (IHT) purposes. The person can demand repayment of the loan, in whole or in part, at any time.
The value of the bond held within the trust, and any income taken from it, can fall as well as rise and your clients, or their beneficiaries, may get back less than the client invested.
To find out more please talk to your usual Legal & General representative or email our technical team
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