Transact launches Flexible Reversionary Trust ahead of pensions/IHT rule changes

Transact has launched its new Flexible Reversionary Trust (FRT) on its platform in preparation for unused pensions coming into the scope of inheritance tax (IHT) from April 2027.

The launch aims to expand its trust offering and strengthen its onshore and offshore bond proposition as advisers get ready for the pensions/IHT rule changes.

Transact said the FRT was developed in response to rising adviser demand for solutions that help families plan efficiently for intergenerational wealth transfers.

As reliance on pensions as an IHT-efficient vehicle falls, advisers were found to be increasing their use of bonds and trust-based strategies for succession planning.

The new FRT can be used in conjunction with Transact’s onshore and offshore bond wrappers, aiming to support clients who want to consider gifting wealth from their estate while maintaining flexibility.

Its structure allows a lump-sum gift into a discretionary trust with the option of pre‑scheduled capital payments back to the donor.

Any growth on the investment is immediately outside the estate, while the original gift can also fall outside the estate after seven years, subject to the usual IHT rules.

“The changes due in April 2027 that make pension wealth subject to IHT represent the biggest change to financial planning in over a decade,” said Transact chief development officer, Andrew Cullen-Jones.

“Advisers are reassessing long-established estate planning strategies and looking more closely at alternative structures for passing wealth between generations. We've seen a marked increase in interest in bonds and trusts over the past year as advisers prepare clients for these changes.

"The launch of our FRT responds directly to that demand, giving advisers another option for clients who want to transfer wealth efficiently while retaining a degree of access and flexibility.

“As the planning landscape evolves, we remain focused on providing both the technical expertise and digital capabilities advisers need to implement these strategies efficiently.”

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