Transact's New Flexible Reversionary Trust ~ Sapientfinance

Transact's New Flexible Reversionary Trust

Whether you currently use investment bonds and trusts or are exploring new estate planning solutions, this latest development may be relevant to your clients.

With defined contribution pensions expected to fall within inheritance tax rules from April 2027, many clients will need to rethink their financial plans – particularly those who have relied on pensions for intergenerational tax planning. This increases the need for solutions that balance ongoing access to capital, control and IHT efficiency.

The Transact Flexible Reversionary Trust is designed to meet these needs. Available with both the Transact onshore and offshore bonds, it allows clients to retain access to capital through policy vesting over time.

Key benefits include:

Potential IHT efficiency – treated as a chargeable lifetime transfer, typically falling outside the estate after seven years.

Access to capital – policies are set to revert at future dates and can be deferred, subject to trustee discretion.

Efficient wealth transfer – assets can be passed to beneficiaries without waiting for probate.

Its flexibility is a key differentiator. Bonds can be split into up to 1,000 individual policies with variable vesting options. Before vesting, the settlor can request that the trustees allow them ownership of the policies, defer to a later date, or waive entitlement. On death, any remaining rights fall away, and the trust fund can be distributed.

As pension tax treatment evolves, trusts are set to play an increasingly important role in financial planning – and this provides a practical flexible option.