I have met with a client this morning who would like to vary her share of her mother’s estate into a trust so that she can have an income from this but also so that it is outside of her estate for IHT purposes (but call on the capital should she need it). She has spoken to her IFAs and they have advised that this can be done using an offshore bond and then calling on 5% of the bond. The main beneficiary is to be her son.
Am I missing something here as I would say that this would fall foul of the GRW rules and any income tax is payable by her (although she is a BR tax payer and I don’t think this will change even with the proposed additional income)
I do not see how this benefits her IHT position?
Any assistance would be gratefully received.