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Is there any reason why money cannot be part lent to trustees of a pilot trust and part gifted? E.g. if £500K is settled, can £325K be by way of cash gift and £175K by way of loan made by the Settlor? My understanding is that even if the gross value of the trust is £500K, the net value would still be £325K and not in excess of the LCT limit. For the purposes of this question we assume that the trust deed includes the usual admin provisions including power to borrow.
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If following (1) above, is there any reason why the Settlor cannot at some point gift / assign the benefit of the IOU note - so that the debt is owned by another? If so, presumably the assignment or gift of the debt is a PET? Any such transfer would not necessarily be contemplated at time of gift into trust.
Many thanks
G. Harvey