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A wealthy widower pays contributions into a bond that has a current surrender value of more than £120,000. This could be surrendered during his lifetime or it will pay out on his death
Our client is very wealthy. He is a widower with significant assets and his estate will be liable to a serious amount of inheritance tax. Various steps including several potentially exempt transfers (PETs) have been taken to reduce it.
One of his remaining assets is an investment – a form of bond into which he still pays a monthly amount – that has a current surrender value of more than £120 000. He could surrender it at any time and take the money.
In any event this investment will pay out on his death – a value broadly equivalent to the surrender value.
It occurs to us to put the death benefit in trust for one of his children something that our client is keen on. What we cannot work out is whether that would represent a PET at this time equal to the surrender value...
