OLD MUTUAL INTERNATIONAL PROVIDING OFFSHORE SOLUTIONS Paul Schrijver

OLD MUTUAL INTERNATIONAL – PROVIDING OFFSHORE SOLUTIONS Paul Schrijver – International Specialist BSc, FPFS, Chartered Financial Planner For Financial Advisers Only.

OFFSHORE BONDS – WHAT HAVE THEY DONE FOR YOUR CLIENTS? SAVING BAND RETURNS GROSS ROLL-UP DIVIDEND TAXATION SELF DETERMINATIO N ASSIGNMENT S 2 SAVING BEYOND PENSIONS HELP YOUR CLIENT TO MANAGE WHAT LEVEL OF TAX IS PAID AND WHEN

APRIL 2015 CHANGES More room for tax planning: £ 2, 880 @ 10% £ 5, 000 @ 0% Savings Band Personal Allowance £ 10, 600 £ 10, 000 2014/15 Source: HMRC Autumn Statement December 2014 3 2015/16

OFFSHORE BONDS – WHAT HAVE THEY DONE FOR YOUR CLIENTS? NO CGT ON SWITCHIN G RELIEF FOR NON RESIDENCE TOP SLICING SELF DETERMINATIO N HELP YOUR CLIENT TO MANAGE WHAT LEVEL OF TAX IS PAID AND WHEN 5% ALLOWANC E 4 NON INCOME PRODUCING

OLD MUTUAL INTERNATIONAL TRUST PLANNING SOLUTIONS For Financial Adviser use only. 5

TRUSTS ARE USEFUL FOR… • Making arrangements for your family, and future additions, because you never know what’s around the corner • Helping with tax planning to reduce your liability, especially for inheritance tax (IHT) • Making gifts – you can specify at what age and in what circumstances your intended beneficiaries can have them • Protecting assets if you don’t want the beneficiary to have full control of them 6

CLIENTS WILL THANK YOU FOR HELPING THEM… • Retain the required control of their assets during their lifetime • Protect assets for their bloodline • Protect assets from creditors • Save on tax liability BIG PICTURE SOLUTIONS FROM OLD MUTUAL INTERNATIONAL 7

TRUST SOLUTIONS FROM OLD MUTUAL INTERNATIONAL Enhanced Loan Trust Discounted Gift Trust Lifestyle Trust 8 ALL WITH THE OPTIONAL ADVANTAGE OF A CORPORATE TRUSTEE…

LOAN TRUST IN ACTION Trust Estate (cash) Held on trust for potential beneficiaries Growth Outside estate as generated £ 300, 000 Still inside the estate until repaid and spent Loan £ 300, 000 Repayable on demand or on death 9 9 Trustees invest into bond

LOAN TRUST – THE FIRST STEP ON THE TRUSTPLANNING LADDER Maybe just inherited money Maybe just experienced IHT for the first time Want to do some IHT planning 10 …BUT NOT GIVE UP ACCESS!

ENHANCED LOAN TRUST Limited liability AND To speed up the IHT benefits No need to take it out of the trust (and lose control) No need to disinvest 11

ENHANCED LOAN TRUST Growth Immediately outside the estate Value Up to NRB Allowance 7 years Trustees invest into bond 7 1212 14 Time

DISCOUNTED GIFT TRUST (DGT) • Income required • Want to reduce IHT liability • Can afford to give up some access to capital • Potential for instant reduction in value of investment for IHT purposes • Remainder of investment is a CLT/PET • Growth outside the estate • ‘Income’ payable 13

DISCOUNTED GIFT TRUST – ‘CARVE OUT’ Settlor Trustees 14 Settlor’s fund based upon mortality & level of withdrawals Residual fund contribution less value of Settlor’s fund Immediate discount CLT/PET

OLD MUTUAL INTERNATIONAL DGT • Allows trustees to use underlying bond to pay on-going adviser fees and any IHT charges • Settlor cannot pay on-going fees after settlement into trust • Existing bond may be settled into DGT at any time • Providing lives assured not settlor or spouse • Settlor can waive withdrawals • Further gift for IHT purposes • Option at outset to defer withdrawals for up to 5 years 15

LIFESTYLE TRUST BENEFITS Flexibility Any age Gift but with access - Settlor can take benefits if needed Control No further Gift - when you decide not to take benefits Choice Access 16 Control The final piece of the Trust jigsaw Efficient

LIFESTYLE TRUST – KEY POINTS THE TRUST • Single Settlor, discretionary trust • Pre-determined dates in schedule two which specify when the policy funds revert to settlor THE IHT TREATMENT • Initial gift into trust is a chargeable lifetime transfer • But no entry tax if within NRB allowance • Discretionary trust taxation applies, periodic and exit charges No underwriting & no maximum age 17 A SOLUTION FOR LIFE

SOLUTION FOR MRS STONE Discretionary trust • An OMI Investment Bond is segmented into 300 policies • Mrs Stone specifies in Schedule Two of the trust deed, how and when she wants the policies to revert to her Policy Fund A Policy Fund B Policy Fund C Policy Fund D Policy Fund E 5 Policies (1 -5) 2016 5 Policies (6 -10) 2017 5 Policies (11 -15) 2018 5 Policies (16 -20) 2019 5 Policies (21 -25) 2020 and so on… 18

ENTITLEMENT IN 2016 Discretionary trust Policy Fund B Policy Fund C Policy Fund D Policy Fund E 5 Policies (6 -10) 2017 5 Policies (11 -15) 2018 5 Policies (16 -20) 2019 5 Policies (21 -25) 2020 and so on… Policy Fund A 5 Policies (1 -5) 2016 Bare trust for Settlor Surrender or assignment of policies 19

ENTITLEMENT IN 2017/2018 Discretionary trust Policy Fund B Policy Fund C Policy Fund D Policy Fund E 5 Policies (6 -10) 2017 5 Policies (11 -15) 2018 5 Policies (16 -20) 2019 5 Policies (21 -25) 2020 and so on… Bare trust for Settlor Surrender or assignment of policies 20

ENTITLEMENT IN 2017/2018 Discretionary trust Policy Fund D Policy Fund E 5 Policies (16 -20) 2019 5 Policies (21 -25) 2020 and so on… Policy Fund B Policy Fund C 5 Policies (6 -10) 2017 5 Policies (11 -15) 2018 Bare trust for Settlor Surrender or assignment of policies 21

ENTITLEMENT IN 2017/2018 Discretionary trust for Settlor Policy Fund B Policy Fund C 5 Policies (6 -10) 2017 5 Policies (11 -15) 2018 Policy Fund D Policy Fund E 5 Policies (16 -20) 2025 5 Policies (21 -25) 2020 Date Extended and so on… Bare trust for Settlor Surrender or assignment of policies 22

LIFESTYLE TRUST – KEY POINTS The Settlor’s interest • Settlor can defer their entitlement , before the vesting date • Once a Policy Fund has vested, the options are: Do nothing, the trustees hold the Policy Fund on bare trust 23 Trustees surrender the Policies and pay Settlor Opportunities for future advice The Trustees assign the Policies to settlor (and if required onwards to another part)

AND FINALLY, THE MOST IMPORTANT QUESTION… WHO SHOULD BE TRUSTEES? FAMILY 24 CORPORATE

FAMILY TRUSTEES – POINTS TO CONSIDER • Do they understand trust law? • Can they keep up to date with changes in trust legislation? • Settlor and spouse only – divorce / death and remarriage? • Children – could they fall out? • Does the settlor want their family to know about their financial affairs? * Trustee Act 2000 in England Wales / The Charities and Trustee Investment (Scotland) Act 2005 / Trustee Act (Northern Ireland) 2001 / Trustee Act 2001 in IOM 25

WHY USE CORPORATE TRUSTEES? • Confidentiality • Confidence that trust deeds and laws aren’t breached • Professional and independent • Continuity – corporate trustees do not die • No dilemma selecting personal trustees • No need to open trustee bank account 26

THE ROLE OF THE PROTECTOR • Optional role • Independent overseer of trustees’ actions • Power of veto over some trustee actions • Power to remove current trustees 27

NEW TRUST DECISION TOOL • New Trust Decision Tool is now available on the Old Mutual International website to use with customers • The tool will take you through a few simple questions before it suggests which trust may be suitable for a customer’s circumstances 28

THE TRUSTABILITY HUB For further help and support Old Mutual International has built a new trust hub, called the ‘trustability hub’ which hosts useful guides, videos and articles. This can be found at: www. oldmutualinternational. com/trustability Choosing a provider with a full range of trust options will help ensure the customer’s needs are fully met and assets are placed within the most efficient trust wrapper. The Trust Decision Tool combined with the Trust Form Finder will help to simplify our Trust proposition and help remove any barriers for advisers. Rachael Griffin, financial planning expert at Old Mutual Wealth 29

TRUST PLANNING – IN SUMMARY • The bond/trust combination is tried and tested • Families will thank you in years to come • Long-term – on-going fees • Clients need help • You are best placed to provide 30

OLD MUTUAL INTERNATIONAL – THE EUROPEAN WEALTH BOND For Financial Advisers Only.

THE EUROPEAN WEALTH BOND – CUSTOMER BENEFITS • Wider investment universe – not restricted to collectives • Access to direct equities, bonds and gilts • Possibility for lower Total Expense Ratios (TERs) • All the tax and trust benefits of the EWB, providing a joined up solution 32

OFFSHORE BONDS – WHAT HAVE THEY DONE FOR YOUR CLIENTS? SAVING BAND RETURNS GROSS ROLL-UP DIVIDEND TAXATION SELF DETERMINATIO N ASSIGNMENT S 33 SAVING BEYOND PENSIONS HELP YOUR CLIENT TO MANAGE WHAT LEVEL OF TAX IS PAID AND WHEN

ANY QUESTIONS? 34

www. oldmutualinternational. com Calls may be monitored and recorded for training purposes and to avoid misunderstandings. Old Mutual International Isle of Man Limited is registered in the Isle of Man under number 24916 C. Registered and Head Office: King Edward Bay House, King Edward Road, Onchan, Isle of Man, IM 99 1 NU, British Isles. Phone: +44 (0)1624 655 555 Fax: +44 (0)1624 611 715. Licensed by the Isle of Man Financial Services Authority. All promotional material is approved by Old Mutual Wealth Limited is authorised and regulated by the Financial Conduct Authority. Financial Services register number 165359. The rules made under the Financial Services and Markets Act 2000 (as amended) for the protection of retail clients in the UK do not apply. Old Mutual International Isle of Man Limited is a member of the Association of International Life Offices. Old Mutual International is registered in the Isle of Man as a business name of Old Mutual International Isle of Man Limited. Old Mutual International Ireland Limited is regulated by the Central Bank of Ireland. Registered No 309649 Administration Centre for correspondence: King Edward Bay House, King Edward Road, Onchan, Isle of Man, IM 99 1 NU Tel: +353(0)1 479 3900 Fax: +353(0)1 475 1020. Head Office Address: Iveagh Court, 6 -8 Harcourt Road, Dublin 2, Ireland. VAT number for Old Mutual International Ireland Limited is 6329649 S. Registered Office: Arthur Cox Building, Earlsfort Terrace, Dublin 2, Ireland. Old Mutual International is registered in Ireland as a business name of Old Mutual International Ireland Limited. Your investment may fall or rise in value and you may not get back what you put in. This document is based on Old Mutual Wealth’s interpretation of the law and HM Revenue and Customs practice as at November 2015. We believe this interpretation is correct, but cannot guarantee it. Tax relief and the tax treatment of investment funds may change. The value of any tax relief will depend on the investor’s individual circumstances. The tax treatment and efficiency of these options will depend on the individual circumstances of each customer. Tax rules and their application may change in the future. Full details of the Old Mutual International Offshore Bond can be obtained from your Old Mutual Consultant or through Old Mutual Wealth’s head office. 35 INT 15 -1172 / November 2015