The Legacy Gift Plan is described by the financial services provider as a tax efficient, controlled way to gift money to beneficiaries under the age of 18.
Clients using the product can set up a gift plan using a Bare Trust and assign trustees to oversee it. A “responsible adult beneficiary” can also be assigned to ensure that the child does not gain premature access to the trust.
Using the product, the child beneficiary does not automatically receive the money on their 18th birthday. Instead, the donor can specify certain dates at which point policies will mature for the child, as well as designating how the money must be spent.
After the child beneficiary turns 18, up to 5% of the remaining capital can be distributed to them each year until a specified date.
The company said the plan allows clients investment into an extensive range of options which, subject to certain withholding tax, can accumulate tax free.
The plan is aimed at clients who are in good health, have an IHT liability and have already utilised their nil rate band for tax-planning purposes.
The group also said the scheme is suited to those who do not require access to the gift themselves, but would like to gift it to a person under 18 while still retaining its control.
IOMA chairman Robin Bigland said: “The product provides ultimate flexibility over when and how much the beneficiary receives from the trust.
“It offers tax-efficient planning in terms of funding for education without giving the beneficiary full access to the trust at age 18, as well as creating a potentially exempt transfer for IHT purposes.
“This is the first of a number of innovative initiatives that will be launched by IOMA Group to help our clients manage their wealth as effectively and efficiently as possible.”
