- Flexible Reversionary Trust complementary addition to Aviva’s trust selection
- Offers client benefits in conjunction with Aviva’s new Onshore Bond
- Latest addition to adviser tax planning toolkit
Aviva has today announced the launch of its new Flexible Reversionary Trust (FRT) on its adviser platform.
The FRT joins the six existing trusts available from Aviva, and has been developed in response to direct feedback from advisers who identified this as a key tool in efficient Inheritance Tax (IHT) planning for them to offer their clients. It has been designed to work with Aviva’s new platform-integrated Onshore Bond, to allow efficient long-term planning for clients.
The FRT offers a flexible way for clients to gift money into a trust while retaining the option to receive capital payments in the future. These payments are scheduled at fixed points, but clients can choose to defer or forgo them, via their trustees, if they no longer need the funds — allowing them to meet their financial goals with flexibility built in.
This discretionary trust structure allows the settlor (the client) to define classes of beneficiaries—such as “children and descendants”—within the trust deed. Additional beneficiaries can be added later. The settlor also selects independent trustees who will have a level of control over how and when benefits are distributed.
This offers several benefits for IHT planning. Clients retain access to their capital and can receive capital payments when individual policy segments vest. These can be scheduled in advance and deferred or overridden by trustees if they’re not required.
Managing clients’ wealth in this way helps reduce the value of their estate for IHT purposes whilst still allowing access to capital if needed. If the client lives for seven years from the date of the chargeable lifetime transfer, the full value of the Aviva Onshore Bond can fall outside their estate for IHT.
Lorna Whalley, Director of Aviva’s Advised Platform, said: “Advisers told us that Flexible Reversionary Trust is a key tool for their clients when they are building in efficiencies for IHT, particularly since the announcement of the changing tax treatment of pension pots. This Trust significantly enhances our existing choice of Trusts, so that advisers can be confident they can recommend the best solutions for their clients’ needs.
“The launch comes with technical material and support for advisers. As well as the usual BDM support we are also running technical webinars next month and we have a suite of technical and marketing support available on our website. We look forward to seeing the progress of this new Trust, particularly following the recent addition of our Smooth Managed Fund, over the coming months.”
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Enquiries:
Catherine Comben
UK Insurance Media Relations
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+44 (0) 7800 692 087
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Notes to editors:
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