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Welcome to RL360's

dedicated financial adviser website

For financial advisers only

Not to be distributed to, or relied on by, retail clients

Split Trust

The Split Trust allows a UK domiciled individual with a RL360 LifePlan policy to undertake flexible Inheritance Tax Planning (IHT) planning where Critical Illness Cover and Life Cover are selected.

Upon the diagnosis of a Critical Illness and subject to surviving the diagnosis by 30 days, the trustees will advance the Critical Illness Cover to the life assured for them to use as they see fit. The Life Cover element of LifePlan will remain in trust and will not be taken into account for IHT valuation purposes on their death.

General features of the trust

  • can only be used with RL360 LifePlan
  • must only be used where the plan is owned by one person where both Critical Illness Cover and Life Cover are selected
  • the Settlor is automatically included as a trustee
  • critical Illness Cover is advanced to life assured (subject to surviving the diagnosis by 30 days)
  • life Cover remains in trust for the beneficiaries
  • life Cover element will not be taken into account for IHT purposes

The Split Trust would be suitable for individuals who

  • require the policy to be placed in trust but require access to a lump sum if diagnosed with a Critical Illness
  • are UK domiciled or deemed UK domiciled for Inheritance Tax purposes
  • wish to avoid Manx Probate and ensure policy proceeds can be paid without further cost or delay

Important notes

Please note that every care has been taken to ensure that the information provided is correct and in accordance with our current understanding of the law and practice at Her Majesty's Revenue and Customs (HMRC) as at August 2012. You should note however, that we cannot take on the role of an individual taxation adviser and independent confirmation should be obtained before acting or refraining from acting upon the information given. The law and HMRC practice are subject to change. Legislation varies from country to country and the policyholder's country of residence may impact on any of the above.