Pilot Trusts

Pilot trusts (also called nil-rate band discretionary trusts) are typically set up with a nominal sum and can be used as part of an inheritance tax planning strategy, particularly in conjunction with death-in-service benefits, life insurance and pension death benefits.

How Pilot Trusts Work

• Set up during your lifetime with a small sum (typically £10)
• Additional assets are added on death (e.g. life insurance proceeds)
• Assets held in trust are outside the surviving spouse's estate
• Each trust established before 22 March 2006 has its own nil-rate band

Who Benefits?

• Individuals with death-in-service benefits
• Those with life insurance policies
• Couples seeking to maximise IHT nil-rate band usage
• Business owners with shareholder protection policies