The Estate Planning Bond

The Estate Planning Bond

The Estate Planning Bond is designed to help your clients pass on their wealth in a tax efficient manner, with the added peace of mind that they are still able to enjoy an ‘income’ from the bond in the form of withdrawals of capital during their lifetime.

The Estate Planning Bond is structured so that the capital is invested during your clients lifetime and has the potential to grow after their death. Once the bond has been set up it cannot be surrendered during their lifetime (and that of their spouse or civil partner in the case of joint applications). Therefore your client must be sure that they can gift the full amount of the investment without requiring access to their capital in the future, other than the predetermined ‘income’ payments. It is not generally suitable for people who have no other form of savings or income.

About the Estate Planning Bond:

  • The Estate Planning Bond is a combination of an offshore, single premium Capital Redemption Bond and a Trust, which is used to mitigate an Inheritance Tax liability whilst providing an ‘income’. The ‘income’ paid from the bond must be determined at the outset and cannot be changed once the bond has commenced.
  • To reduce your clients Inheritance Tax liability, the investment is separated from the rest of their estate and placed into a Trust, which will then be managed by the appointed Trustees. There are two types of Trust to choose from; the Absolute Trust or the Discretionary Trust.
  • It is unit linked, which means that the investment is used to purchase units in the chosen funds, thereby pooling the investment with those of other investors with similar objectives. This has the benefit of spreading the investment and administration costs. Unit prices in the bond can fall as well as rise and are not guaranteed. Taking into account market fluctuations, the appointed trustees could get back less than invested, especially in the early years.
  • We offer access to a range of AXA Family, Select and External investment funds. Funds are available with a variety of risk profiles. Details of the choice of investment funds available can be obtained on request from your Business Development Manager. Depending on the funds chosen, there may be an initial charge and a yearly management charge.
  • The minimum investment into the Estate Planning Bond is £50,000 and there is no maximum.

To read about the Estate Planning Bond in detail please visit our website AXA Isle of Man Online or speak to your Business Development Manager. Our product key features and special risks and charges guides are available on request and to download from our website.