Our Lifestyle Trust 10 Having considered Mrs Stone’s needs and attitude, her financial adviser recommends that she invests into a bond with Quilter subject to a Lifestyle Trust. The trust does not oblige her to specify the names of her beneficiaries at outset so it can be used (for example) to benefit any grandchildren (current and future). It also means that she can limit her inheritance tax liability. Setting up the Trust The gift into trust is £300,000 which is below the nil-rate band. Therefore, there is no immediate charge to inheritance tax (under the CLT rules). Any growth will be immediately outside her estate for inheritance tax purposes. If she lives for seven years, there will be no further inheritance tax charge on her estate in respect of the £300,000 gift. The bond, which was taken out on 6 July 2021, is segmented into 1,000 equal policies. Mrs Stone has specified in the trust documentation, how and when she wants the policies to revert to her. (See table right.) This case study is fictional and used purely to illustrate possible real-life scenarios. The value of investments can fall as well as rise and investors may not get back what they put in. Growth figures do not include bond charges. The Lifestyle Trust in action An illustrative example Mrs Stone is aged 55 and divorced. She is working full-time, has two children and three grandchildren. Assets House: £800,000 Savings and investments: £500,000 Income Annual salary: £100,000 Goal To reduce her estate and inheritance tax bill Amount to invest Lump sum of £300,000. Does not require a regular income from it Attitude Reluctant to gift all £300,000 as may require access in the future Gifting history None