IHT Planning Share Class

Levendi have recently launched a new share class of the Levendi Thornbridge Defined Return Fund that has been specifically designed to work within a flexible reversionary trust or a discretionary trust. The fund offers the possibility of capital growth, a degree of protection when markets fall and does not rely on rising markets to generate a positive return. The zero-distributable yield avoids the costs and complexities of collecting and distributing any income received by the trust to the beneficiaries and an Income Tax liability for the Settlor (flexible reversionary trust) or Trustees (discretionary trust).

The new share class has been created specifically for Trustees of flexible reversionary trusts and discretionary trusts that want investments that offer the possibility of lower risk capital gains and do not want to receive an income. The share class has an annual distribution. The amount payable is 100% of the income received by the fund. But because the fund does not receive any income, this means the distribution will be zero. This meets the requirement of a reversionary trust to invest in assets which make it possible / easy to identify, collect and distribute all the income generated while not generating an income.

Using the new W Share Class within a flexible reversionary trust offers significant benefits to Settlors and Beneficiaries

  • Assets held by the trust are outside the Settlor’s estate after seven years
  • The fund fees are low, there are no additional costs incurred avoiding income.
  • There are no fees at the trust level collecting and distributing income.
  • Fund units can be transferred into and out of the trust in-specie.
  • The fund offers the possibility of capital growth and a degree of protection if markets fall.
  • The fund has daily liquidity allowing the trustees to liquidate the fund to meet any requirements for Settlor to receive a payment back from the trust.
  • The trust can lend money if Beneficiaries need to access assets held in the trust,
  • Any growth within the trust can be sheltered using the trusts CGT allowance.
  • Finally, when the trust is distributed, an in-specie transfer allows the Beneficiaries to use their own annual CGT allowance to realise the value of the assets that they have received, staggered over multiple tax years, if necessary.
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