The Pensions Discretionary (2 year) Trust forces benefits to be paid within two years of death, resulting in no inheritance tax (IHT) liability. Alternatively, the Pensions Discretionary (80 year) Trust should be considered when it might not be appropriate to pay out benefits within two years of the member’s death.

For example, it may be advantageous to avoid the death benefits being subject to IHT on the subsequent death of the spouse or civil partner. Though this may incur an IHT liability, the lump sum can then be retained and invested inside the trust for up to 80 years and allows the spouse access to the benefits if required via an interest-free loan.

Dave Lowe, pensions management director at Zurich, says, ‘Individual pension trusts are an important retirement planning area for financial advisers, and Zurich is pleased to support this expanding market with innovative solutions.  

‘Choice, control and flexibility are crucial factors for clients, and by developing these new trusts we endeavour to make it easier to help consumers understand the complexities around trust planning.’

Both trusts are available for new business customers and can be used in conjunction with the Zurich SIPP and Protected Rights Transfer Plan.

For more information, call 0800 546546.