Following changes in the law regarding pre-owned assets in trust (POATs), Standard Life has urged people to reconsider even simple flexible trusts that they have placed their property in.
In simple terms and for example, if you have placed property in a flexible but you have continued to live in it (since 1986) you will be required to pay income tax. Their suggestion is to consider a Gift & Loan Trust.
Our view
The Gift and Loan arrangement is something that we, along with many insurers, have commended for years.
Effectively what a Gift and Loan arrangement does is that you make a gift e.g. £1 to set up a trust. You then make a loan to the trust e.g. £20,000. The trust then repays the debt to you (so that you have an "income"