Loan Trust

The FPIL Loan Trust allows UK domiciled individuals to make a loan into a trust, rather than an outright gift.

Issues for consideration

  • The Loan Trust is only available for use with new applications. It cannot be setup on an existing plan.
  • The lender can request the loan to be repaid at any time.
  • Only the outstanding loan amount can be repaid to the lender.
  • There are no restrictions on the amount or frequency of repayments.
  • Taking more than 5% of the cumulative tax deferred allowance as a withdrawal in a plan year could trigger a chargeable event if UK resident.
  • Only the growth is outside of the settlor’s estate for IHT planning.
  • Any loan repayments that have not been spent will remain inside of the estate.

Trust Deed

How it Works Guide