Trust Wind Up - Friends Provident International being difficult

Hi - Has anyone else come across this and been able to challenge it?

Trustees have an FPI offshore bond started in 2010 worth c.£650k. Now looking to wind up the Trust and assign segments out to the beneficiaries, so that they can draw on them/encash them in their own time (both now adults and earning c.£40k pa).

Trust exit charge will be due, which is fine and understood. A big driver for winding the Trust up is to mitigate any future tax charges (and the Trustees want to simplify the whole situation).

But, FPI are being really unhelpful, having made a change to 'company policy' around 18 months ago. They tell me that we can no longer assign segments without immediately encashing them! Obviously this will create massive tax charges on the beneficiaries and remove the control they wanted.

FPI have said the only other option would be to have the beneficiaries as joint owners (Joint tenants basis), and then assign segments out to them as individuals to encash as and when required. Obviously not good if one of them died as the survivor would by default own the whole lot - I think this would leave the Trustees open to future legal challenge.

I have no idea how FPI are able to change the terms of the original contract after 12 years - do we think this is legally dodgy. Any thoughts or ideas greatly accepted!

Sign In or Register to comment.