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Repaying a Loan Trust and distributing growth to the Beneficiaries

Aidan_2310Aidan_2310 Member
in Technical stuff

Hi all,

I am currently working on a case whereby we are looking to fully encash the Bond within a Loan Trust, repay the outstanding loan to the Settlor, and then distribute any growth equally amongst the beneficiaries.

There is no Trustee bank account, however Quilter have confirmed that they are fine to pay all the proceeds to the Trustee, who incidentally is also the Settlor, for him to then essentially repay himself the Loan amount and then distribute the growth amongst the beneficiaries. Is this okay to do, or would those distributions be seen as PETs?

Kind regards,
Aidan.

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Comments

  • richardgoughrichardgough Member

    Make sure you have 2 payment transactions - one for the loan and one for the growth.

    Your paper trail, etc shows that the growth payment is being held by the Trustee, and so the subsequent payments are from the trust, not the client, so not PETs.

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  • Aidan_2310Aidan_2310 Member

    Hi Richard,

    Appreciate that, thank you for confirming!

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