SLG LiveSite Portlet

Loan Plan


Our Loan Plan can help your clients reduce their Inheritance Tax (IHT) liability without giving up access to assets.

How it works

The Loan Plan is easy to set up and to operate. The client doesn’t give up access to cash – it is merely loaned to the Plan. The client will automatically be a trustee so also has control over the way the trust assets are invested and dispersed.

The client establishes a trust, appoints trustees and may nominate beneficiaries. The client makes a loan to the trustees who use the Loan to purchase a Standard Life Bond. The International Bond, Wrap International Portfolio Bond, Tailored Investment Bond, With Profits Bond or the Wrap Onshore Bond can all be used with a Standard Life Loan Plan.

Repayment of the loan

The loan is typically repaid at a rate of 5% a year over 20 years. Your client can demand repayment of the outstanding loan at any time.

Types of trust

With the Loan Plan your clients can choose the type of trust that best suits their goals:

  • Discretionary trust – lets the client indicate who they would like to benefit from the Plan, but the trustees have the final choice
  • Flexible trust – lets the trustees choose who benefits from the beneficiaries defined in the Trust. At outset your client will specify a main beneficiary or beneficiaries. They are entitled to any income and will benefit if the trustees don’t make any choice about the trust fund
  • Absolute trust – your client specifies the beneficiaries when the Plan is set up. These beneficiaries can’t be changed by the trustees

Benefits for your clients

  • IHT savings – any growth in the investments held in the Plan will be outside the client’s estate immediately for IHT purposes.
  • Client retains access – as this is a loan and not a gift it can be repaid by regular payments from the Plan or on demand
  • Flexibility – allows the client to select beneficiaries without including this in a will. For flexibility, a discretionary or flexible trust should be used
  • In the event of the settler's death, payment can be made to trustees without any need for probate/confirmation.

Benefits for your business

  • Creates other business opportunities – by discussing the Loan Plan with your clients, you are giving more comprehensive advice to your client and can start a wider estate planning conversation, which could lead to other business opportunities
SLG LiveSite Portlet
SLG LiveSite Portlet

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