IOMA Group, an Isle of Man-based wealth management firm, has launched an estate planning scheme, named Legacy Gift Plan, which is aimed at regulating the client wealth distribution to child beneficiaries under the age of 18.
According to International Adviser, the company described its new scheme as a tax efficient, controlled way to gift money to beneficiaries.
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Clients can set up this tax efficient product through a Bare Trust, assigning trustees to oversee it including an adult beneficiary to prevent the child getting premature access to the trust, International Adviser report says.
Further, the donor could specify certain dates for maturity of the policy for the beneficiary instead of the child gaining control of the money automatically upon turning 18. The client can also designate how the money must be spent.
Upon turning 18, the child beneficiary will receive up to 5% of the remaining capital each year until a specified date.
The plan designed for clients in good health, along with an IHT liability must also have utilized their nil rate band for tax-planning purposes.
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By GlobalDataIOMA chairman Robin Bigland was quoted by the publication as saying that the product provides ultimate flexibility over when and how much the beneficiary receives from the trust.
"It offers tax-efficient planning in terms of funding for education without giving the beneficiary full access to the trust at age 18, as well as creating a potentially exempt transfer for IHT purposes," added Bigland.
"This is the first of a number of innovative initiatives that will be launched by IOMA Group to help our clients manage their wealth as effectively and efficiently as possible."
The Legacy Gift Plan offers clients a range of options to investment into, which after liable to certain withholding tax, can accumulate tax free.
