Zurich International Portfolio Bond
Discretionary Discounted Gift Trust adviser guide
For intermediary use only – not for use with your clients.
Contents
Introduction3
1. The main benefits of the Discretionary Discounted
Gift Trust (DDGT) – investor suitability
4
2. Who is the DDGT not suitable for?
4
3. How does the DDGT work?
4
4. The Settlor’s Fund
5
5. The inheritance tax effects of the DDGT
7
6. The DDGT and tax avoidance rules
12
7. The Trustees and Beneficiaries
14
8. The investments of the DDGT
15
9. Joint investors and the DDGT
15
10.Other important questions
16
11.How do you set up a DDGT?
18
Appendix19
2
Introduction
The growing scope of
inheritance tax
Inheritance tax (IHT) can significantly diminish
the amount passing to a person’s beneficiaries
on death. On a person’s death, IHT applies at a
flat rate of 40% on the excess over the nil rate
band. This is £325,000 for the 2014/15 tax year
and will remain frozen until 2018.
For some married couples (including civil partners)
the introduction of the transferable nil rate band
by the Finance Act 2008 has helped to reduce
the potential IHT bill on their estates. This is
because any percentage of the nil rate band
not used on the death of the first of such a
couple to die can be utilised on the survivor’s
subsequent death. Whilst this is a welcome
relief, many married couples will find that the
value of their combined estates may well still
exceed the threshold above which IHT is payable.
For example, based on a nil rate band of
£325,000, on the death of a surviving spouse
with a taxable estate of £1 million an IHT charge
of £140,000 would still arise even though two
full nil rate bands may be available.
Using lifetime gifts to reduce IHT
One very effective way to avoid IHT is to make
lifetime gifts. Lifetime gifts that are potentially
exempt transfers (PETs) give rise to no IHT when
made. However, following the new rules
introduced by the Finance Act 2006, the scope
for making PETs has been severely restricted so
that only outright gifts to other individuals or
gifts to bare (or absolute) trusts and trusts for
the disabled qualify as PETs. All other lifetime
gifts to trusts will be chargeable lifetime
transfers (CLTs). However, no immediate tax
liability will arise unless the amount of the gift
(plus any CLTs made in the previous seven years)
exceeds the nil rate band at the time of the
transfer. Also, once the donor has survived a gift
by seven years, no liability can arise on the gift
and it will not affect the amount of tax payable
on the donor’s estate either.
For a gift to be effective for IHT, the donor
cannot retain any access to the property gifted
or the income from it as otherwise the gift with
reservation (GWR) rules will apply. These rules,
which apply when a donor makes a gift and
continues to enjoy a benefit from the asset
gifted without paying for that benefit, mean
the value of the gift continues to form part
of the donor’s taxable estate for IHT purposes
and so no IHT saving results.
For many ‘would be’ donors, as well as requiring
access to funds to be given, there will be a desire
to exercise control over who will eventually benefit
from the gift, on what terms and at what time.
It is in these circumstances that a Discounted
Gift Trust, such as the DDGT, can help.
The DDGT is a lump sum investment plan
combined with a suitable trust that helps an
investor to mitigate IHT whilst providing them
with a regular stream of capital payments and
control over the final destination of the amount
transferred into trust.
In this guide
the term ‘spouse’
includes registered civil
partner. Tax rules apply
to registered civil
partners in the same
way as they apply to
married couples.
3
1. The main benefits of the
Discretionary Discounted Gift Trust
(DDGT) – investor suitability
The DDGT enables an investor to:
• make a tax-efficient investment into an
Investment Bond held in trust for the benefit
of their family which gives rise to a lifetime
gift (a discounted gift) that has a lower value
for IHT than the amount of the investment;
• make a lifetime gift without an immediate
IHT liability (as long as the nil rate band is not
exceeded) whilst retaining flexibility over who
will ultimately benefit from the gift;
• avoid any IHT implications resulting from the
gift on survival of the gift by seven years;
• ensure that investment growth accrues
outside of their estate during their life and
(where appropriate) the life of their spouse;
• enjoy a tax-efficient cash supplement to
income for the rest of their life; and
• where relevant, make a joint investment
with a spouse and enjoy a cash supplement
to income and control throughout their
joint lives.
2. Who is the DDGT not
suitable for?
Broadly speaking, where the benefits
summarised above are not required or valued
by the investor, the DDGT will not be suitable.
More particularly, the DDGT is not suitable for
persons who may require full, immediate or
unrestricted access to the capital invested. It also
may not be suitable for persons whose income
needs are likely to vary significantly in the future.
3. How does the DDGT work?
The DDGT comprises of two components – a
Trust and a Zurich International Portfolio Bond
(the Plan) effected with Zurich Life Assurance plc
(Zurich) held subject to the Trust. These two
components will now be described in more detail.
4
(i) The Trust
The investor (who is known as ‘the Settlor’)
and additional Trustees appointed by the Settlor
execute a Deed of Trust which sets out the
terms of the gift. The Settlor gives the Trustees
a cheque made payable to Zurich in satisfaction
of his commitment to make a cash gift. The
Trustees (including the Settlor) will then
complete an application form for the Plan
– see (ii) below – using the Settlor’s gift as
the payment under the Plan. Legal ownership
of the Plan then vests in the Trustees.
The Trust operates as follows:
• The Trust Fund will be notionally split into
two parts: the ‘Settlor’s Fund’ and the
‘Beneficiaries’ Fund’.
• Under the Settlor’s Fund, the Settlor retains
an absolute right to future regular capital
payments until his death. This is expressed as
a percentage of the initial investment in the
Plan. Payments may be made monthly in
arrears, monthly deferred for one year or
yearly in arrears.
• The residual fund is known as the
Beneficiaries’ Fund and this is held for the
benefit of the Beneficiaries under the Trust.
After the Settlor’s death, the Trustees can
distribute it to the Beneficiaries.
• The Beneficiaries’ Fund is held on
discretionary trust. This means that no
Beneficiary has a fixed right to any benefit.
The Appointor (the Settlor during their life,
and the Trustees after the Settlor’s death)
decide who, from the class of Discretionary
Beneficiaries, should receive what benefit
from the Trust. The Settlor names the Default
Beneficiary(ies) at outset. This is/These are the
person/people the Settlor would ultimately like
to benefit from the Trust after their death.
However, the Default Beneficiary(ies) will only
benefit if the Appointor makes an absolute
appointment to them or when the Trust ends
after 125 years with no appointment having
been made by the Appointor.
(ii) The Plan
4. The Settlor’s Fund
The underlying investment of the DDGT is
a Zurich International Portfolio Bond that,
depending on the version chosen, will be a
whole of life insurance policy or a capital
redemption policy. An investment in a nonincome producing asset, such as a life insurance
policy or capital redemption policy, means that
trust administration is minimised and the
investor is substantially sheltered from any
personal income tax during the Plan’s existence.
Under the Trust, the Settlor is entitled to the
Settlor’s Fund. This means that when the Settlor
survives to the relevant payment date, they will
become entitled to a capital sum at that time.
These capital sums can be used as income.
The Trustees are entitled to draw up to 5% of
the initial investment each year, without any tax
charge at that time, for up to 20 years and this
provides a very convenient and tax effective
method for the Trustees to finance the Settlor’s
entitlement to the capital payments under the
Trust. The Trustees can arrange for Zurich to pay
withdrawals direct to the Settlor on their behalf
by including the Settlor’s bank or building
society details in the ‘Bank/Building Society
details’ box of the application form.
After the Settlor has established the Trust, the
Trustees effect the Plan. If the life insurance
version is chosen, the Plan should be effected
on the lives of some or all of the Beneficiaries
(subject to the maximum of ten), usually those
named as the Default Beneficiaries, on a joint
lives last survivor basis – these will normally be
the Settlor’s children or grandchildren. Because
the Plan will encash on the death of the last
surviving life insured, it is preferable that there is
more than one life insured because this gives
more control over encashment of the Plan from
both an investment and tax standpoint.
The following important points should be noted
in relation to the Settlor’s entitlement to regular
capital payments:
• At outset, the Settlor must choose the initial
level of capital payments from the Trust – as a
percentage of the Plan investment. This cannot
later be changed (although it may be possible
to give up capital payments – see later).
• The Trustees can use their 5% tax-deferred
annual withdrawal allowances to take part
surrenders from the Plan and so finance the
payments to the Settlor under the terms of
the Trust. For administrative ease, the
Trustees can instruct Zurich to pay these
direct to the Settlor.
• The DDGT can allow more than one Settlor.
For example, for married investors, by making
a joint investment, capital payments will
continue to the surviving spouse after the
first death.
The Plan must not be effected on the lives
of the Settlor or Settlor’s spouse in order to
ensure that the arrangement cannot be
caught by the IHT anti-avoidance rule in
para 7 Schedule 20 Finance Act 1986 – see
section 6 of this guide for more details.
No lives insured are needed if the capital
redemption version is chosen.
Once the Plan is issued in the name of the
Trustees, it is part of the trust property and
legally belongs to the Trustees.
5
Frequently asked questions:
(i) Can the Settlor change the amount
of capital payments they are entitled to?
Once the Trust is established, the Settlor cannot
directly change the amount of the ‘income’
entitlement. If there is a wish to reduce or give
up some of the capital payments, this can be
done by the Settlor executing a suitable Deed
of Release.
Such action will have important tax and legal
consequences and any deed should be drafted
by a solicitor and only after the Settlor has taken
professional advice. Zurich cannot advise on such
dealings as this is not the intention of the DDGT
and the Settlor should seek their own
professional advice if circumstances change.
In no circumstances can the level of capital
payments increase.
(ii) Can the Settlor defer entitlement to
capital payments?
Under the DDGT, the Settlor has the following
options: 1. monthly in arrears, 2. monthly
deferred for one year or 3. yearly in arrears.
So the latest the payments must start is one
year after the Plan start date.
(iii) Can the Settlor’s spouse receive
capital payments?
This is only possible if both spouses are making
the gift as joint Settlors. Of course, if the spouse
isn’t a Settlor, they will be a Discretionary
Beneficiary and able to benefit from the Trust
Fund following the Settlor’s death at the
Trustees’ discretion.
(iv) Does the Settlor have to take capital
payments from the DDGT?
Yes, on survival to the appropriate date,
as the Settlor then satisfies the contingency
and becomes entitled to the capital amount.
If having survived to the appropriate date
the Settlor does not need the capital payment,
a gift of the cash received can be made.
This would (depending on the circumstances)
normally be a PET. Alternatively, if it is known
in advance that a forthcoming capital payment
is not needed, the right to the capital payment
or payments could be given up in advance,
as explained in question (v).
6
(v) What if the Settlor no longer needs
the capital payments?
The Settlor could either:
(i) separately gift cash to Beneficiaries out of the
capital payments they receive from the
Trustees; or
(ii)waive the right to all or some of the capital
payments under the Trust. In order to waive
all or a part of the entitlement, the Settlor
would need to provide the Trustees with a
Deed of Release drafted by their legal advisers.
They should also take appropriate advice on
the implications of this. The Trustees would
then need to send a copy to Zurich so that no
automatic payment is made to the Settlor.
The Settlor could give up one capital payment or
a series of such payments. If one payment only is
given up this will be a CLT by the Settlor equal
to the amount of the capital payment given up.
This may well be covered by the Settlor’s annual
exemption. If a series of capital entitlements is
being given up, this will require an actuarial
valuation based on the Settlor’s age and state of
health to determine the value given up. As such
actions are not contemplated under the DDGT,
Zurich will not be able to assist with the
valuation on such an occasion. Giving up an
entitlement will also be a CLT and there could,
depending on the circumstances, be immediate
IHT implications.
This is a complex area and Zurich can take no
responsibility for this. Advice should be sought
from your client’s legal advisers.
In order to avoid possible tax complications,
the Trust does not give the Settlor any specific
power to give up the right to capital payments.
Any such action would therefore need to be
taken by the Settlor outside of the terms of
the Trust.
It is strongly recommended that the Settlor
should first consult professional advisers over
how the right to capital payments could be
given up and what the tax implications would
be. As already explained, external professional
advice will have to be supplied and any
documentation drafted by the Settlor’s solicitor.
(vi) How are the capital payments taxed?
The Settlor is entitled to a stream of capital
payments at stated frequencies. These are known
as reversionary interests. These payments are
capital and therefore not subject to income tax.
In the case of Stevenson -v- Wishart (1987)
1 WLR 1204, the Court of Appeal decided that
if capital payments are made out of a trust to
a beneficiary entitled to that capital, those
payments would be treated as capital unless
paid as a result of a specific direction in the
trust to supplement trust income with capital.
The capital payments are funded by the
Trustees taking withdrawals from the Plan
sufficient to meet the capital payments due to
the Settlor. The Trustees are entitled to withdraw
up to 5% of the initial investment each year,
for 20 years, with no income tax at that time.
Any withdrawals that exceed these 5% allowances
will be assessed to income tax on the Settlor
if alive and UK resident. The usual rules which
apply to the taxation of chargeable event gains
apply – see section 8 of this guide, part B of the
Appendix and the Zurich International Portfolio
Bond (ZIPB) brochure for full details.
(vii) How do the Trustees make the
capital payments to the Settlor?
The Trustees would normally set up a regular
withdrawal facility under the Plan to finance
these payments to the Settlor. The Trustees
could arrange for these payments to be paid
direct to the Settlor by including appropriate
details in the Bank/Building Society details box
on the ZIPB application form.
5. The inheritance tax effects
of the DDGT
(i) Establishing the Trust
The DDGT enables an investor to make an
investment in trust under which the gift will
be totally free of IHT and there will be no
consequences for the Settlor’s estate after
seven years, as long as the initial discounted
gift falls within the Settlor’s nil rate band for IHT.
For these purposes, CLTs made in the previous
seven years need to be taken into account. If the
Settlor dies within seven years of establishing
the DDGT, the discounted gift will be included
in their taxable estate and may result in an IHT
liability, depending on the size of the Settlor’s
estate and their Will provisions. If the discounted
gift causes the Settlor’s nil rate band to be
exceeded (on a seven year cumulative basis),
there will be an immediate 20% IHT charge
on the excess over the nil rate band.
If the Settlor is to pay the IHT, this will mean
that the gift needs to be ‘grossed-up’ so that the
actual amount of the loss to the estate on which
tax is payable takes account of the tax payment.
Example
John invests in a DDGT which results in a
CLT of £340,000 to the Trust. He has made
no CLTs in the previous seven years and
his annual exemptions have been used
elsewhere. Either the Trustees can pay IHT of
£3,000 (i.e. 20% of £340,000 – £325,000)
or John can pay IHT of £3,750 (i.e. 20% of
£343,750 – £325,000).
A further tax liability (at 20%) on the gift could
arise if the Settlor dies within seven years of
making the transfer (see point (vii) of this section).
7
It is generally not recommended that the Settlor
makes a gift in excess of their available nil rate
band. This is not only so that no immediate tax
liability arises but also to avoid the practical
difficulties that this may give rise to. For
example, if the Trustees were to pay the tax,
they would need to keep some of the cash gift
back in order to fund the tax and so the amount
of cash available for investment would be
reduced. They would also need to open a bank
account which the Settlor’s gift cheque would
have to be paid into first, so it would not be
possible for the Settlor to simply make a cheque
payable to Zurich. If, on the other hand, the
Settlor were to pay the tax, the gift would have
to be grossed-up and the grossed-up figure used
in all IHT calculations, including the value of the
discount, and this is likely to be more
complicated. Zurich can only calculate the
discount by reference to the amount invested.
For the purpose of this guide, we assume that
the initial gift is fully covered by the Settlor’s
available nil rate band. Further details on this are
included in the Appendix.
(ii) What is a discounted gift?
Because the Settlor retains a right to regular
capital payments from the Trust via the
reversionary interests (known as the Settlor’s
Fund), this right will have a value for IHT purposes
which stays inside the Settlor’s estate. For the
purposes of calculating the gift at outset, the
value of the initial investment can therefore be
reduced (or ‘discounted’) for the purposes of
IHT by this ‘retained value’. This discounted
value remains relevant for IHT calculation
purposes should the Settlor die within seven
years of the gift.
8
(iii) Why is there no value attached to the
Settlor’s Fund on death?
Although the right to future capital payments
has a value during the Settlor’s lifetime, no value
will be included in the Settlor’s estate on death
in respect of the Settlor’s Fund. This is because
the Settlor’s right to the stream of ‘future
capital payments’ ceases on death and therefore
immediately before the Settlor’s death this right
is worthless, meaning no value needs to be
included in the Settlor’s taxable estate at
that time.
(iv) How is the size of the discounted gift
determined?
The value of the Settlor’s right to future regular
capital payments (i.e. the Settlor’s Fund) is
calculated taking into account the Settlor’s
(or both Settlors’ if appropriate) age, state of
health and the amount and frequency of the
capital payments they are entitled to.
For new Plans, the difference between the value
of the Settlor’s Fund and the amount of the
initial investment will be treated as a transfer of
value for IHT purposes and will be a CLT.
It is not recommended that gifts are made
if they cause the Settlor’s available nil rate band
to be exceeded, as an immediate tax charge at
20% will then arise.
(v) Underwriting the gift to calculate
the discount
Zurich will underwrite the Settlor to establish
the amount of the discounted gift. Subject to
the Settlor being satisfied with this discounted
gift valuation, the investment can then proceed.
To enable the underwriting to be carried out,
Zurich require that the Settlor completes a
health questionnaire at outset and, if appropriate,
they then obtain medical evidence from the
Settlor’s GP. The only time a General Practitioner’s
Report (GPR) won’t be collected is where the
Settlor’s application has to be declined because
of information included in the Settlor’s health
questionnaire.
(vi) Does HM Revenue & Customs (HMRC)
need to be informed about the DDGT?
For cash gifts into trusts, such as for the DDGT,
if the CLT arising on the gift into this Trust,
when added to CLTs the Settlor has made in
the previous seven years, causes the Settlor to
exceed the nil rate band (see above) and so
tax is due, the Settlor must report the transfer
to HMRC Inheritance Tax on forms IHT100,
IHT100a and D34.
(vii) What are the IHT implications of the
Settlor dying within seven years of
establishing the DDGT?
If the Settlor does not survive the gift by seven
years, the IHT liability on the original CLT needs
to be recalculated at death rates. If the discounted
gift was within the Settlor’s available nil rate
band (as is recommended), no IHT will be due
on the gift itself. However, an equivalent amount
of the nil rate band will no longer be available
to the estate of the Settlor. If this passes to
someone other than the surviving spouse,
an IHT liability at 40% will arise on the
amount in excess of the nil rate band.
If the nil rate band was exceeded, so that
lifetime tax at 20% was paid, the rate of tax
charged will increase to 40%. IHT taper relief
will be available in which case the IHT liability
may start to reduce after the third year because
of this taper relief. However, it will never be
possible to recover any IHT paid at outset.
(viii) What are the IHT implications for
the Trust itself?
The Periodic Charge
Periodic charges at ten-yearly intervals are,
broadly speaking, applied to the value of the
assets in the Trust (although special rules apply
to determine the value of trust property for
Discounted Gift Trusts – see below).
The effective rate of IHT will be determined
based on an assumed transfer by an assumed
transferor. This will mean that it will broadly be
necessary to take account of:
• the value of the property in the Trust on the
ten-year anniversary and any other trust set
up on the same day (the assumed transfer)
and,
• the Settlor’s cumulative total of CLTs made
immediately before the Trust was established
plus any sums paid out of the Trust in the ten
years prior to the anniversary (the cumulative
total of the assumed transferor).
The maximum liability will be 6% of the value of
the trust property but frequently it will be much
less or nil.
In cases where the Settlor has not made any
CLTs in the seven years before the Trust is
created, no payments have been made out of
the Trust in the previous ten years and there has
been no added property, there will be no liability
provided the value of the Trust does not exceed
the nil rate band applicable at the ten-year
anniversary. Any excess over the then nil rate
band will suffer IHT at 6%.
As this is a discretionary trust, this means that
special IHT charging rules apply.
Under these rules there may be IHT charges:
• on every ten-year anniversary of the Trust
– ‘the Periodic Charge’ and/or,
• whenever property leaves the Trust (e.g.
when capital is advanced to a Beneficiary)
– ‘the Exit Charge’.
9
Example
The Exit Charge
Kevin creates a DDGT in July 2009 for
£300,000. The value of Kevin’s retained
rights is £150,000 and so the discounted
gift is £150,000 based on an annual capital
payment to Kevin of £15,000 (5% of the
investment in the Plan).
Exit charges will be based on the value of
property leaving the Trust.
Kevin has made no CLTs in the previous
seven years. No payments are made out of
the Trust in the first ten years (other than the
capital payments to Kevin out of the Settlor’s
Fund, which are ignored for this purpose).
In July 2019 the Trust Fund is worth, say,
£300,000 and the nil rate band is, say,
£400,000. No IHT is payable.
For the purposes of calculating the value of
the trust fund for the periodic charge, HMRC
has confirmed that the present value of the
Settlor’s right to future capital payments at
that time (i.e. at the ten-year anniversary)
should be deducted from the value of the
trust fund (i.e. the Plan). This means that an
amount in respect of the then value of the
Settlor’s rights would need to be deducted
from the value of the Plan.
Had the value of the Plan been £475,000
after ten years with the Settlor’s rights
valued at £25,000, then the value of the
relevant property in the settlement would
have been £450,000 and IHT of £3,000
would have arisen (£50,000 @ 6%). This
equates to a charge at 0.66% on the whole
value of the trust property.
If all the Trust Fund is distributed before the
tenth anniversary, no tax charge will arise
(see next section). If assets remain in the
Trust after a distribution, the Trustees will
need to obtain specialist tax advice.
10
HMRC has confirmed that no exit charge will arise
on payments made to the Settlor under a trust,
such as a DDGT, because this property is already
held absolutely on bare trust for the Settlor.
There will be no exit charges within the first ten
years of the DDGT’s existence if the value of the
initial CLT going into the Trust (i.e. the discounted
gift) plus the cumulative total of the Settlor’s
CLTs in the seven years prior to creating the
Trust is below the nil rate band when the Trust is
created, assuming no property has been added
to the Trust. If an exit charge does arise, it will
increase according to the number of quarters
that have expired since the Trust was created.
The amount of any exit charge occurring after
the first ten years will depend on the rate of
tax charged at the previous ten-year anniversary
(if any) and the length of time (in quarters)
that the property has been in the Trust since
the last periodic charge. If there is no periodic
charge at the immediately preceding ten-year
anniversary then there will be no exit charge
in the next ten years.
Example
In 2025, six years since the first ten-year
anniversary, and after Kevin’s death, the
Trustees of Kevin’s Trust pay £50,000 to a
Beneficiary. Assuming the rate of IHT paid
at the last ten-year anniversary was 0.66%,
the IHT charge will be £50,000
x 0.66% x 24
= £198.
40
No IHT charge will arise on property paid
out of the Trust if there was no IHT charge
at the last ten-year anniversary.
An exit charge will not arise on loans made
by the Trustees to the Beneficiaries.
The occasion of a periodic charge and
transactions that can give rise to an exit
charge, such as capital payments to the
Beneficiaries, may also need to be reported
to HMRC on forms 100c and 100d (and
form D34 where a life insurance bond is
involved) if they exceed a certain amount.
(ix) What are the IHT implications of
the Settlor surviving to the selected
reversionary dates?
Each time the Settlor survives to the appropriate
anniversary date of the Trust and becomes
entitled to a capital payment, the Trustees will
make a capital payment to the Settlor.
The exit charge can arise, generally speaking,
where property or part of the property
comprised in the settlement ceases to be
relevant property – see previous page.
Under a DDGT the question arises as to whether
the Settlor’s capital payments, being payments
from property that is not relevant property
(i.e. property held on bare trust for the Settlor),
would give rise to an exit charge. As stated
above, HMRC has confirmed that the capital
payments paid to the Settlor do not give rise
to exit charges.
This means that no returns will be needed to
HMRC in respect of the capital payments made
to the Settlor.
(x) How is the amount of the discounted
gift arrived at when there are joint Settlors
who are spouses or civil partners?
Where spouses or civil partners invest as joint
Settlors, the cheque establishing the arrangement
must be drawn on a joint bank account (or two
individual cheques each for half of the total
investment). Each Settlor will then be treated
as making an investment equal to 50% of the
total investment. However, the discounted gift
made by each will vary because of the different
mortality factors that will apply due to age and
state of health.
11
Example
Let’s assume that Paul and Sue (who are
both UK domiciled) invest £100,000 as joint
Settlors into a DDGT under which they are
entitled to a total payment of £5,000 each
year throughout their joint lives and the life
of the survivor. Each is treated as making an
investment of £50,000 which will provide
each of them with a capital payment of
£2,500 each year throughout each lifetime.
Sue is younger than Paul.
The joint discounted gift is calculated as
£46,300 on the £100,000 joint investment
and it will be apportioned according to Paul
and Sue’s ‘income’ rights on their individual
investments of £50,000 each. Because of
differing mortality factors, the discounted
gift elements will differ.
For example, Paul’s discounted gift might be
£26,400 and Sue’s £19,900. This will reflect
the likelihood of Sue living longer than
Paul (because she’s younger), which means
her Settlor’s Fund will have a greater value.
However, the amount retained by each of
them will also include an allowance for the
‘income’ right that person may receive as
survivor if he/she outlives the first to die.
HMRC has issued guidance notes on how
this calculation should be made. In broad
terms, the joint discount will be apportioned
between Paul and Sue according to the
respective value of their ‘income’ rights.
If there are joint Settlors who have
contributed equally, the Trust is effectively
treated as two separate Trusts, each settled
by one Settlor, for all IHT purposes. Where
the Trust is to be created by a husband and
wife and one (or both) are non-UK
domiciled, separate professional advice
should be taken.
12
6. The DDGT and tax avoidance rules
Two potential pieces of tax avoidance legislation
could apply to the DDGT – the IHT gift with
reservation rules and the income tax pre-owned
assets tax rules.
(i) The gift with reservation (GWR) rules
These rules apply in cases where a donor makes
a gift of assets and continues to enjoy a free
benefit from those assets – be it the enjoyment
of income or access to capital under a trust.
On the face of it, as under the DDGT an
individual makes an investment in a trust and
enjoys a regular flow of capital payments from
it, the GWR rules would appear to be capable
of application.
In fact they do not apply, but to understand why
these provisions do not apply, it is necessary to
first consider the precise nature of the Settlor’s
entitlements under the Trust. These are known
as reversionary interests which means that the
Settlor is only entitled to the payments on
survival to the appropriate payment date.
In principle, the GWR rules could apply by virtue
of one of two provisions:
a) Section 102 Finance Act 1986
Under this provision, if a donor enjoys a
benefit from property they have gifted,
it will be a GWR. However, as was established
in the House of Lords decision in the Ingram
case, the GWR rules will not apply where the
donor makes a gift of identifiable property
from which they cannot benefit and keeps
back separate identifiable property from
which they can benefit and which remains
in their estate.
In the case of the DDGT, the property
retained is the Settlor’s Fund (the right to
the reversionary interests) and the property
gifted is the Beneficiaries’ Fund. As the
Settlor cannot benefit from the Beneficiaries’
Fund, section 102 will not apply.
b)Para 7 Schedule 20 Finance Act 1986
This provision means that where a person
makes a gift of a life insurance policy effected
‘on his life or the life of his spouse’ (which
would include a registered civil partner) and
the rights under that policy vary between the
donor and the donee of the gift, then the
gift of that policy will be a GWR.
With the DDGT, para 7 Schedule 20 will not
apply because the Plan will not be effected on
the life of either the Settlor or their spouse.
Furthermore, any variation of rights occurs
under the Trust and not the policy. This is
only relevant if the life insurance version is
chosen, as there are no lives insured under
the capital redemption version of the Plan.
(ii) The pre-owned assets tax rules
Schedule 15 Finance Act 2004 introduced the
pre-owned assets tax (POAT) rules. These rules
apply where the donor of an asset continues to
enjoy a free benefit from the asset they have
gifted and that gift is not caught by the IHT GWR
rules. In those circumstances if, using special
valuation rules, the value of the benefit together
with other POAT benefits of the same donor
exceeds £5,000 in a tax year, the whole of that
benefit is charged to income tax on the donor.
For the POAT rules to apply on a gift of
investments, two conditions need to be satisfied:
a) The property must be held on a settlement.
b) The donor must be able to benefit from the
property in the settlement. (The test for this
is whether section 624 ITTOIA 2005 would
apply to the settlement.)
For these purposes, property held on a bare
trust is not held on a settlement. Moreover,
under the legislation if a trust consists of a
number of separate sub-trusts, each of those
sub-trusts must be tested separately. This means
that when different property in a settlement is
subject to different trusts only the particular
property which is ‘caught’ is subject to the
charge imposed by Schedule 15, and not (where
greater) the whole property of the settlement.
Where such sub-trusts exist, it is therefore
necessary to test each of those sub-trusts
independently to see if the POAT rules apply.
Under the DDGT certain interests are held for
the benefit of the Settlor (the Settlor’s Fund)
and some for the Beneficiaries (the Beneficiaries’
Fund). This means that the Trust Fund is comprised
of two sub-funds, one is the ‘Settlor’s Fund’ and
the other the ‘Beneficiaries’ Fund’. Both funds
therefore need to be tested against the two
conditions to see if they are subject to the
POAT rules.
In this respect, the Settlor’s Fund is held on
bare trust for the Settlor and so this part of
the Trust is not held subject to a settlement
– a pre-condition for the POAT rules to apply.
Whilst the Beneficiaries’ Fund is held on a
settlement, the Settlor cannot benefit from this
part and so, again, the POAT rules do not apply
because the second condition is not satisfied.
HMRC has also confirmed in their Guidance
Notes on the POAT issued in May 2007 that
the more commonly understood forms of
Discounted Gift Trust are not subject to
the POAT legislation.
13
7. The Trustees and Beneficiaries
(i) Who can be Trustees of the DDGT?
The Settlor will automatically be a Trustee.
Additional Trustees must be appointed and this
is contemplated in the Trust Deed at outset.
Anyone over 18 years old and of sound mind
may be appointed. It may be appropriate to
appoint a professional adviser, such as a solicitor
or accountant, as a Trustee, although such a
person is likely to charge a fee for acting as
Trustee. It is essential that at least one additional
Trustee survives the Settlor if probate is to be
avoided following the Settlor’s death.
(ii) Who are the Beneficiaries under
the Trust?
The Settlor is entitled to a stream of cash
payments specified at outset each time they
survive to a payment date. This is known as the
Settlor’s Fund. The balance of the benefits is
held as the Beneficiaries’ Fund. The Beneficiaries’
Fund is held on discretionary trust for the
Beneficiaries.
As the Trust is discretionary, no Beneficiary is
entitled to anything until the Appointor makes
an appointment in their favour. If any income
arises to the Trustees from the trust investments
(not relevant while the sole trust asset is the
Zurich International Portfolio Bond), they can
either accumulate it during the Trust Period or
distribute it (or some of it) to whichever
Beneficiary they decide. However, no Beneficiary
will have the right to any income – distributions
will be at the discretion of the Trustees.
The Trustees have powers to deal with the
trust property, including wide powers to invest,
as well as the power to advance capital to
any Beneficiary.
14
Discretionary Beneficiaries are the people to
whom the Appointor can appoint benefits and
include the following persons:
• The Settlor’s spouse/civil partner (if he/she
is not also a Settlor).
• Children and remoter issue of the Settlor.
• Any spouse, widow or widower of the Settlor’s
children and remoter issue. For this purpose
spouse includes a registered civil partner.
• Any other person (other than a Settlor)
whom the Settlor may appoint to the class
of potential Beneficiaries.
An appointment should not be made to the
Settlor’s spouse during the Settlor’s lifetime as
this could give rise to a reservation of benefit
if the Settlor enjoys an indirect benefit.
The Settlor names (as ‘Default Beneficiaries’)
the individual or individuals who the Settlor
would like to benefit from the Trust Fund if no
other appointment is made. However, in order
for these people to become entitled to benefits,
the Appointor at that time (the Settlor or the
Trustees – see below) must appoint benefits in
their favour. If no appointment is made during
the Trust Period, they will become entitled to
the Trust Fund at the end of the Trust Period.
(iii) Who is the Appointor under
the DDGT?
The Appointor is the Settlor(s) whilst alive
and then the Trustees. However, if the
appointment is in favour of the Settlor’s
spouse or civil partner, it must always be
made by the Trustees.
8. The investments of the DDGT
(i) What investments can be held in
the DDGT?
The Trustees must invest in a Zurich International
Portfolio Bond. This can be based on a life
insurance or capital redemption version.
(ii) What are the income tax implications
of the DDGT?
An income tax chargeable event gain can arise
in the event of the Plan being encashed or a
part surrender of more than the cumulative
5% tax deferred annual allowances being taken.
Chargeable event gains will be taxed on the
Settlor if alive and UK resident in the tax year
in which they arise.
Liability to tax will be at the Settlor’s marginal
rate(s). For the purposes of the liability to higher
rate or additional rate tax only, top-slicing relief
will apply so, in general, the gain will be divided
by the number of whole years the Plan has been
in force.
As the Plan is an offshore investment plan,
there is no UK tax deemed to have been paid
on any gain, with the result that the full amount
of the gain is subject to UK income tax. This is
different from the income tax treatment of gains
within a UK-based plan, where basic rate tax is
deemed to have been paid within the plan, and
gains are only taxed when they take the taxpayer
into the higher rate or additional rate of tax.
If the Settlor is not alive in the tax year in which
the chargeable event occurs, or is not resident
in the UK for tax purposes, the Trustees, if they
are UK resident, will be liable for any tax on
the gain. The gain will be taxed at the trust
rate – currently 45% – except for the gains
falling within the £1,000 standard rate tax band
available to the Trustees, where the tax charge
will be at the rate of 20% only.
If the Trustees are not UK resident, the chargeable
event gains will be assessed on any UK ordinarily
resident Beneficiaries when, and to the extent
that, they receive any benefits from the Trust.
The above rules apply regardless of whether the
Plan is based on the life insurance or capital
redemption version.
The Trustees should think very carefully before
encashing the Plan while the Settlor is still alive
and entitled to a regular flow of capital
payments. Under the terms of the Trust, the
Trustees are responsible for continuing to make
these payments and a Plan which benefits from
the 5% tax-deferred annual allowances is an
ideal vehicle for investment by the Trustees.
For more detail on income tax in connection
with the Plan see part B of the Appendix.
9. Joint investors and the DDGT
(i) Should spouses each set up their
own individual DDGT?
This is not recommended because under the trust
underlying each individual DDGT, the Settlor’s
spouse is a potential Beneficiary and these could
then be regarded as reciprocal arrangements
and so invoke the GWR provisions. It would be
better for spouses to effect one joint Settlor DDGT.
(ii) Can ‘income’ be paid to the Settlor’s
spouse after the Settlor’s death?
Only if both spouses are making the gift as joint
Settlors. The Trust will then provide reversionary
capital payments to both Settlors throughout
both of their lives. They will then enjoy ‘income’
throughout both of their lives. Of course, if the
spouse isn’t also a Settlor, they will be a
Discretionary Beneficiary and able to benefit
from the Trust Fund following the Settlor’s
death at the Trustees’ discretion.
15
(iii) What happens on the death of
the Settlor(s)?
(iii) Can the Plan be added to at
a future date?
The Settlor’s entitlement to regular capital
payments will then cease (unless there is a
surviving joint Settlor).
Further investments in the Plan are not
permitted. If the Settlor wishes to make further
gifts they should make a fresh investment into
a new Plan subject to a new Trust.
No value will be included in the Settlor’s estate
in respect of the right to future capital payments
as that entitlement relies on the Settlor then
being alive. Similarly, in joint Settlor cases where
the right to capital payments continues to the
Settlor’s surviving spouse, no value will be included
in the estate of the first Settlor to die in respect
of the ‘interest’ passing to the surviving spouse
as it is not property in their estate that they can
give away. Any value of this right passing to the
surviving spouse is taken into account in
calculating the discounted gift at outset.
Following the Settlor’s death (or the death of
the surviving Settlor) the Trustees can then
either retain the Plan as a long-term tax-efficient
investment for the Beneficiaries or encash the
Plan and distribute the proceeds. There may
be tax deferral advantages in continuing with
the Trust.
10. Other important questions
(i) What are the capital gains tax
implications of the DDGT?
A life insurance or capital redemption bond,
such as the Zurich International Portfolio Bond,
does not produce gains that are subject to
capital gains tax.
(ii) Is stamp duty payable?
With effect from 1 December 2003, stamp duty
on documents was abolished which means that
a declaration of trust no longer needs stamping.
16
(iv) Can the Trustees take withdrawals
which exceed the Settlor’s capital
entitlement?
It needs to be borne in mind that it is the
Trustees’ prime responsibility to pay the Settlor
any capital payments they are entitled to as and
when they survive to the appropriate dates.
The Trustees cannot pay them more than their
entitlement on the specified date and it would
be unwise to pay benefits to Beneficiaries other
than the Settlor during the Settlor’s lifetime.
(v) Can the Trustees encash segments
of the Plan and pay the proceeds to
the Beneficiaries?
The Trustees could, in extreme cases, take this
action but, because of the reasons given in the
previous answer, it is not thought that this
would be a prudent course of action whilst the
Settlor is alive. After the Settlor’s death, there
would be no reason why the Trustees could not
make an absolute appointment and
advancement of capital to an adult Beneficiary.
If the Trustees wish to make such an
advancement they can encash part or the whole
of the Plan and advance cash to the Beneficiary.
Alternatively, the Trustees could make an
absolute appointment of capital to an adult
Beneficiary and assign segments to that
Beneficiary in satisfaction of their interest.
The Beneficiary must then encash the segments
themselves and, in such a case, chargeable
event gains will be taxed on that Beneficiary
which may produce a lower tax liability than
if the Trustees had encashed.
(vi) What if the Plan loses value so the
Settlor cannot be paid their capital
entitlements?
The Settlor’s entitlement is subject to the Trust
Fund being sufficient to meet that entitlement.
The Trustees have no personal liability to the
Settlor in cases where the investment reduces
in value.
(vii) Can an investor get their money
back after making the investment?
Yes, they can. When we issue the Plan documents,
we’ll include information on how to cancel the
Plan. They (the Settlor(s) and all additional
Trustees) will have 30 days from receiving these
documents to do this. If they decide to cancel,
we’ll give them their money back. However,
what they get back may not be the amount
they invested – they may get back less.
The amount they will get back will be the lower
of the amount they invested and the value of
their transaction account after we have sold the
assets that they have already invested in.
If they invest in assets that are not priced daily,
there may be a delay in paying the cancellation
value until all trades have been completed.
Please refer to the Plan’s Terms and Conditions
for full details.
(viii) Is there any income tax on final
encashment of the Plan?
Chargeable event gains arising on full encashment
of the Plan can be taxable. The full implications
were described in the answer to the above
question ‘What are the income tax implications
of the DDGT?’ and in the Appendix.
(ix) What are the charges associated
with an investment in the DDGT?
You should look at Zurich’s literature on the
International Portfolio Bond in order to determine
the charges made on such an investment.
17
11. How do you set up a DDGT?
Your client will have had a full discussion with you
(and other professional advisers where appropriate)
about the operation of the DDGT and its suitability
for them given their objectives and tax position –
see all the issues covered in this guide. Having
decided that the DDGT is suitable in principle, the
potential investor will receive a personal Discount
Illustration from you (available online) and a
Zurich International Portfolio Bond illustration
showing estimated future values for the Plan.
After this, completing the following steps will lead
to implementation.
Step 1 A health questionnaire must be completed by your client(s) and at this stage,
only this form must be submitted to Zurich.
Step 2 Zurich will underwrite your client(s) and if they are accepted, we will issue a
Discount Certificate to confirm the discount. If your client(s) fails the underwriting
process, a decline letter will be sent.
Step 3 If your client(s) then wishes to proceed, the DDGT Deed must be completed and the
Trustees must complete the right application form for the Plan. This application form
must not be dated before the date of the DDGT Deed. The clearly labelled application
form is subtitled ‘Application form for use with a Discretionary Discounted Gift Trust’.
The Trustees cannot use any other application form, as the wording is not appropriate.
The forms (completed Trust Deed and Plan application form), along with your client’s
cheque (or telegraphic transfer) for the full amount to be invested and the anti-money
laundering information (ID & address verification for the Settlor(s) and all additional
Trustees) should be sent to Zurich.
Step 4 The Plan will be issued in the name of the Trustees and the Plan documents will
be sent out soon after this.
18
Appendix
This Appendix to the Adviser Guide provides more detailed
information and examples on the potential inheritance tax
(IHT) and income tax liabilities that could arise in connection
with the DDGT.
It is, however, emphasised that in most cases
it is expected that Plans will not give rise to IHT
or income tax – at least during the lifetime of
the Settlor. Of course, this will all depend on
the facts of each case.
A. Inheritance tax
First example – trust creation with
immediate IHT liability
The DDGT is a discretionary trust (relevant
property trust). Transfers into this type of trust
are treated as chargeable lifetime transfers (CLTs)
for IHT purposes. The value for IHT is calculated
by adding together any CLTs made in the seven
years before the current gift (potentially exempt
transfers [PETs] are ignored) with the current
gift. The question is whether the total exceeds
the current IHT nil rate band (NRB). If the answer
is ‘yes’, then only the amount above the NRB will
be subject to IHT. The rate of tax applicable in
this instance is 20%.
PETs
October 2003
October 2005
Example
Mr Smith made a CLT of £100,000 in October
2003 and a PET of the same amount in
October 2005. In July 2009 he wishes to set
up a DDGT for £750,000 that results in a CLT
of £325,000 into a relevant property trust.
The IHT position at entry would be as shown
in the table below.
In this example, the IHT bill is £20,000, with the
tax payable by the Trustees. If the Trustees have
to pay the tax, they will have less funds available
for investment in the Plan. If Mr Smith wishes
to pay the tax there would be a gift of the tax
as well. Under these circumstances, the gift
would need to be ‘grossed up’. The easiest way
of calculating the revised amount of tax payable
is to replace the 20% tax rate with one of 25%,
so the tax payable on the gift will be £25,000.
CLTs
IHT payable
£100,000
£100,000
July 2009
£325,000
Total of CLTs in last seven years
£425,000
NRB 2009/10
(£325,000)
CLT in ‘taxing zone’
£100,000
Tax rate
x 20%
Tax payable
£20,000
19
Second example – periodic charge
In determining whether the value of the Trust
Fund exceeds the NRB at the ten-year anniversary,
you also need to take account of any CLTs made
in the seven years before establishing the Trust
and the amount of any payments out of the
Trust in the previous ten years.
Example
Let us assume the value of the DDGT in our
example has grown to £800,000 by July
2019 and the value of the Settlor’s right has
fallen to £250,000. This means that the gifted
part of the Trust is valued at £550,000. The
NRB at that time is £450,000. The calculation
of the IHT ten-yearly charge is:
(CLTs in the seven years before the Trust
commenced + capital distributions from
the Trust in the ten years preceding the
anniversary + the value of the Trust
(less the current value of the projected
withdrawals – the Settlor’s Fund) – NRB)
x 6% = tax payable.
NB – After the Settlor’s death, the ten-yearly
charge would be based on the actual value
of the Trust Fund as the Settlor’s rights
would no longer exist – see next example.
October 2003
£100,000
Value of gifted part of Trust Fund
£550,000
Cumulative total
£650,000
IHT payable
NRB 2019/20
(£450,000)
CLT in ‘taxing zone’
£200,000
Tax rate
x 6%
Tax payable
20
CLTs in seven years before Trust started
£12,000
Third example – exit charge
B. Income tax
The rate of the exit charge is the appropriate
fraction of the rate, if any, that was charged
at the last ten-year anniversary but:
What follows is a series of questions and
answers covering what are considered to be
the more fundamental issues of investment
bond taxation.
(i) ignoring any reduction made to reflect the
fact that some of the settled property had
not been held in the settlement for a full
ten years and
(ii)increased if any property added to the
settlement since the last ten-year anniversary
would have caused the rate at the ten-year
anniversary to be higher. So, if there has been
any added property, the previous ten year
rate will need to be recalculated as if that
added property were comprised in the
settlement at the last ten-year anniversary.
The appropriate fraction is calculated as one
fortieth for each complete period of three
months (a quarter) that has elapsed since the
last ten-year anniversary. If the general rates of
tax have decreased since the time of the charge
at the last ten-year anniversary, the current
lower rates are used in the calculation.
Example
Let us assume in our example that the Settlor
dies in June 2025 when the DDGT is valued
at, say, £1 million. The Trustees decide to
wind up the Trust and pay the Trust Fund to
the Beneficiaries.
The payment is made in July 2025, six years
after the last ten-year anniversary (periodic)
charge. At the last ten-year anniversary, tax
of £12,000 was charged when the Trust was
valued at £550,000.
The rate of tax charged was therefore
£12,000/£550,000 x 100 = 2.182%
The number of quarters since the last
ten year anniversary = 24
Tax on exit = 2.182% x 24/40
x £1,000,000 = £13,092
How are the proceeds of the Plan taxed?
The proceeds of the Plan are free of capital
gains tax. However, a charge to income tax
on a gain can arise:
• if the Plan is fully surrendered;
• if the Plan is assigned for money or
money’s worth;
• if any partial encashments in a policy year
exceed 5% per annum of the amount
invested on a 20 year cumulative basis;
• if the cumulative total of partial encashments
exceeds 100% of the amount invested;
• on payment of the death benefit under the
life insurance version;
• on maturity under the capital
redemption version.
These are called ‘chargeable events’ and if they
occur while the Settlor is alive and UK resident
for tax purposes, any gain or excess in respect
of the Plan is deemed to form part of the
Settlor’s income for the tax year in which the
chargeable event occurs. A liability to tax will
arise if the Settlor is a UK taxpayer or the gain
causes them to become one.
For the purposes of higher rate or additional rate
tax, top-slicing relief will apply so, in general, the
gain will be divided by the number of whole
years the Plan has been in force.
Liability to tax will be at the Settlor’s marginal
rate(s). As the Zurich International Portfolio Bond
(the Plan) is an offshore portfolio investment bond
(which has not suffered UK tax at fund level), the
full amount of the gain is subject to UK income tax.
This is different from the income tax treatment
of gains within a UK-based plan, where basic rate
tax is deemed to have been paid within the plan,
and gains are only taxed when they take the
taxpayer into the 40% higher rate band or the 45%
additional rate band, and then at a rate of tax of
only 20% or 25% as appropriate.
21
As mentioned above, the Trustees can make
withdrawals from the Plan to make the capital
payments to the investor. The Trustees can
encash up to 5% of the amount invested in the
Plan annually, for 20 years, and pay that amount
to the Settlor without any immediate liability to
tax under the chargeable event rules. Although
they are capital payments, they can be used
by the Settlor as ‘income’. However, these
withdrawals will be included in the calculation
of any gain when the Plan is finally surrendered
or pays out on death. If the capital payments
exceed 5% of the amount invested in the Plan
in a year, the Settlor may be liable to pay tax
on the amount above 5%. The Settlor is entitled
to recover the tax on any chargeable event gain
from the Trustees.
If the Settlor is not alive in the tax year in which
the chargeable event occurs, or is not resident
in the UK for tax purposes, the Trustees, if they
are UK resident, will be liable for any tax on the
gain. The gain will be taxed at the trust rate –
currently 45% – except for the gains falling
within the £1,000 standard rate tax band
available to the Trustees, where the tax charge
will be at the rate of 20% only. If the Trustees
are not UK resident, the tax charge on any gain
or excess will be assessed on any UK ordinarily
resident Beneficiaries when, and to the extent
that, they receive any benefits from the Trust.
22
Anyone who is liable for tax in respect of a
gain or excess (other than in their capacity as a
Trustee) may have any entitlement to age related
personal allowances or tax credits affected since
the gain is added to their total income to
determine entitlement to the allowance or credit.
From 6 April 2010, gains or excesses may also
affect entitlement to the basic personal allowance
if they take the investor’s income over £100,000.
It is possible, therefore, that the investor’s overall
tax liability may increase as a result of having a
chargeable event gain assessed on them.
Could the capital payments be taxed as
income under any other taxing provision?
As the Settlor has an absolute entitlement to
them and they are not paid by the Trustees
under a power in the Trust to top up income at
their discretion, capital payments will be treated
as capital and will not be subject to income tax.
The Settlor is specifically excluded from any
benefit under the Beneficiaries’ Fund.
Will this Trust be affected by the taxation
of pre-owned assets legislation?
We do not believe that this Trust will be caught
by the taxation of pre-owned assets legislation.
Indeed, HMRC has confirmed in their guidance
notes to this tax that the pre-owned assets tax
provisions will not, in general, apply to this type
of trust.
Important notes
Creating a trust is an important matter and has
lasting legal and tax consequences. This guide
is for your general information only and cannot
cover every situation. If you are in any doubt
about the purpose or effect of this Trust, you
should consult your own legal advisers.
The Trust, once created, is irrevocable and the
Plan and its benefits must be held according to
the terms of the Trust. The Trustees will be in
control of the operation of the Trust, which
means that they may need to set up a Trustee
bank account. Any benefits arising because of
the exercise of options available under the Plan
will also be held subject to the Trust.
Taxation law is subject to change. Such changes
cannot be foreseen. The information in this guide
is based on our understanding of current law
and HMRC practice (January 2015). Although
every care has been taken in the preparation of
this guide and the draft Trust Deed (including
the securing of an opinion from leading tax
counsel), neither Zurich Life Assurance plc nor
any of its officers, employees or agents accept
responsibility for the operation of the Trust.
Your attention is drawn to the ‘Important
information for the Settlor’ section of the
Trust Deed.
23
NP128356A52 (02/15) RRD
The Zurich International Portfolio Bond is provided by Zurich Life Assurance plc.
Zurich Life Assurance plc is authorised and regulated by the Central Bank of
Ireland and subject to limited regulation by the Financial Conduct Authority
for the conduct of insurance business in the UK.
Registered office: Zurich House, Frascati Road, Blackrock, Co Dublin, Ireland.
Registered in Ireland under company number 58098.
We may record or monitor calls to improve our service.