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In perpetuity

16 February 2010 / John Woolley
Issue: 4243 / Categories: Comment & Analysis , Trusts
JOHN WOOLLEY examines perpetuity periods and accumulation periods of spousal by-pass trusts

KEY POINTS

  • The Perpetuities and Accumulations Act 2009 increases the perpetuity period. Pension scheme trusts and the perpetuities rule.
  • Changes are being made to the accumulation period under trusts.
  • Inheritance tax planning opportunities.

A spousal by-pass trust (as it is generally called) is a trust of lump sum pension death benefits from a registered scheme under which the deceased member’s widow or widower is a potential beneficiary.

The object of the trust is to make sure that the death benefits do not form part of the taxable estate of the widow or widower yet still give them possible access to those funds as a beneficiary to whom the trustees can appoint benefits or lend funds.

A spousal by-pass trust will usually be established in one of two ways. Either:

  • the member will declare a trust of death...

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