Scottish Life International welcomes HMRC clarification on discounts
Wednesday, 09 May 2007
Scottish Life International welcomes the publication of the HM Revenue & Customs technical note on Discounted Gift Schemes.
The note sets out the HM Revenue & Customs view on the valuation of transfers to discounted gift trusts and the underlying valuation methodology. For the first time HM Revenue & Customs has published the detail of its approach to the controversial valuation issue.
Commenting on the note Gerry Brown, Technical Manager with Scottish Life International said,
"This technical note will help clear up the confusion surrounding the value of transfers to discounted gift trusts. This clarity is important because following the changes to the inheritance tax treatment of trusts introduced last year, the value transferred triggers an immediate inheritance tax charge, subject of course to the availability of annual exemptions and the nil rate band. It is vital that this charge be established as accurately and as quickly as possible as it will have a continuing impact on the inheritance tax position and will be of relevance in developing additional planning strategies.
"Financial advisers and their clients will have the confidence of knowing that transfer values quoted by life offices will stand up to HM Revenue & Customs scrutiny, provided of course that full disclosure of the relevant factors has been made."
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editors notes:
Scottish Life International was launched in 1996 and is now part of the Royal London Group. The company has grown rapidly in size and now has funds under management in excess of £742 million from investors in the UK and around the world (as at 31 March 2007). Scottish Life International is based in the Isle of Man, where it is supervised by the Isle of Man Government Insurance and Pensions Authority.
Scottish Life International is a member of the Association of International Life Offices (AILO) and sponsors IFA Promotion (IFAP), which supports the need for independent financial advice.
Holders of policies issued by Scottish Life International Insurance Company Limited, based in the Isle of Man, will not be protected by the UK Financial Services Compensation Scheme if the company becomes unable to meet its liabilities to them. Policyholders will however be protected by the Isle of Man Life Assurance (Compensation of Policyholders) Regulations 1991.
Royal London Group is a specialist financial service provider. Its businesses focus
on those sectors of the market which value premium propositions, operating through
a number of brands:
• Scottish Life - UK pensions market
• Bright Grey - UK protection market
• Scottish Life International - offshore investment markets
• RLAM - fund management
• RLAS - life and pensions administration
Royal London is one of the stronger life and pension companies in the UK, and has a particularly strong track record for with profits performance.
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £31.5 billion. Group businesses serve over three million customers and employ 2, 610 people (figures quoted all as at 31 March 2007.)
Contact details:
pressoffice@sli.co.im / 0131 456 6031 or
Gerry Brown
Technical Manager
Scottish Life International
0131 456 6024
07919 171 587
gerry.brown@sli.co.im
Issued by Scottish Life International Investment Group Limited, a Royal London company which is authorised and regulated by the Financial Services Authority. Registered in Scotland number 166387. Registered office: 19 St Andrew Square, Edinburgh EH2 1YE.