Excluded Property Trust

Our Excluded Property Trust provides a way of protecting offshore bond investments or UK OEICs from Inheritance Tax liabilities if your clients are UK residents but not currently UK domiciled or treated as UK domiciled.

  • Choice of two Prudential International bonds
  • Full control over investments
  • Option to take tax-efficient withdrawals from the trust
  • Can reduce Inheritance Tax liability for beneficiaries
  • Investment options: your client can choose to invest in one of the bonds from Prudential International. In addition, the trustees may invest in UK OEICs.
  • Tax efficiency: trustees have the opportunity to take tax-efficient withdrawals from the trust for your client or their beneficiaries.
  • Inheritance Tax (IHT): there will be no UK IHT to pay if the only investments are 'excluded property' such as Prudential International bonds or UK OEICs.
  • Non-UK Domiciled: the trust is designed for clients who are currently non-UK domiciled but may in the future become UK domiciled.
  • Full control: the trustees have full control over the investments in the trust.

The value of any investment can go down as well as up so your client might get back less than they put in.

The Excluded Property Trust is for clients who are currently not domiciled within the UK or treated as domiciled within the UK, who want to mitigate IHT when they later become UK domiciled. The trust fund will not be subject to IHT providing it holds ‘excluded property’.

The trustees have full control over the investments and are able to make payments to any beneficiary, including your client who is the settlor, at any time.

The trust can also provide IHT protection for beneficiaries, even if they're UK domiciled. The investments will not form part of their estates until distributed to them, so any funds that remain in the trust will not be liable for UK IHT.

More information on what determines where assets are situated can be found in the Client guide to trusts.

  • This trust will not be suitable in all cases and other forms of tax and trust planning may be more suitable in individual circumstances.
  • Creating a trust can have taxation as well as legal consequences.
  • Once a trust has been created it cannot be revoked.
  • The trustees have special duties to the settlor and beneficiaries and the misuse of a trust power by a trustee can make her/him personally liable for resulting losses.
  • Situations that may involve international or cross-border legal and taxation issues can be extremely complex.
  • Tax and trust law can be open to differing interpretations.
  • The information about Excluded Property Trust is based on current tax rules. Tax rules can change and the impact of taxation (and any tax relief) depends on your client's individual circumstances.

Every care has been taken to ensure the accuracy of this information. Prudential and Prudential International and their representatives cannot accept responsibility for loss, however caused, suffered by any person who has acted or refrained from acting as a result of the material published on this website or with the use of accompanying trust instruments.