AJ Bell Investcentre has launched a discretionary loan trust for advisers taking care of clients’ inheritance tax (IHT) and estate planning needs.
This comes following the launch of a discretionary gift trust and absolute gift trust for use with AJ Bell Investcentre General Investment Accounts (GIAs) in December.
AJ Bell worked with Technical Connection to develop the trust deeds that are designed to give advisers access to flexible, open architecture solutions at a time when IHT is pulling more families into its net.
The range of trusts available offer flexible, tax efficient solutions for advisers who are dealing with an increased number of client queries around IHT and estate planning – a trend set to continue. Research from AJ Bell and Ad Lucem found that 63% of advisers see IHT and estate planning as an important or critical part of their proposition, with four in five advised clients saying IHT planning is an important part of the advice they expect. Three-quarters (76%) of advisers also stated they would value access to open architecture investing through a GIA, coupled with a range of trusts with full provider support*.
The discretionary loan trust is now available on the AJ Bell Investcentre advised platform and can be used with GIAs, providing advisers with an open architecture structure. Advisers can access supporting documents on all three trusts via the AJ Bell Investcentre website.
AJ Bell will launch its first onshore bond link in due course, to provide advisers with an even more comprehensive range of tax planning tools.
*Source: AJ Bell, Ad Lucem. Based on a geographically representative online survey of 1,000 advised clients and 100 financial advisers across 100 different firms, carried out between May and June 2025.
Mark Rendle, AJ Bell advised product director, says:
“It is no secret that advisers need a range of tools and investments to plan tax efficiently for clients, particularly when guiding them through the increasingly complex estate planning process. That is why we have launched our third trust in a matter of months, providing advisers with an even wider range of investment options to protect client wealth and improve the intergenerational wealth transfer process.
“We are listening to advisers’ concerns in an ever-changing and uncertain tax environment, and we want to ensure they are supported as comprehensively as possible in navigating it with client money. Alongside our range of trusts and other enhancements to our advised platform, the launch of our first onshore bond link in due course will help to further build out our proposition and achieve that goal.”
Tony Wickenden, Technical Connection managing director and founder, adds:
“Tax effective estate planning that gives clients control and access of the underlying investments is well served for those with investable cash by a wide range of excellent investment bond and trust combinations. We have been delighted to collaborate with AJ Bell to create some similarly tax effective and flexible estate planning solutions where the underlying investment of choice is a GIA.
“We believe that investment choice should not be restricted when a trust is appropriate, and all of the trusts and a wide range of supporting documents come with detailed adviser and client facing guides to their legal and taxation treatment to aid that process.”
What’s the difference between the discretionary loan trust and the other two available trusts?
A discretionary loan trust is used when a client wishes to pass on the future growth of an investment while retaining access to the original capital. The settlor lends money to the trust, so there is no initial gift and no reduction to the settlor’s estate for IHT purposes. The trust invests the loaned funds, and any investment growth falls outside of the settlor’s estate for the beneficiaries. The settlor can request repayment of the outstanding loan (in whole or in part) at any time.
By contrast, both the discretionary gift trust and absolute gift trust involve the settlor making an outright gift into the trust. These gifts fund the investments within the trust and (to the extent they are not exempt) are treated as either chargeable lifetime transfers (CLTs) in the case of a discretionary trust, or potentially exempt transfers (PETs) for an absolute trust. The gifted funds fall outside the settlor’s estate for IHT purposes, subject to the relevant IHT rules.
How do trusts work?
A trust is the formal transfer of assets to a person or persons, known as trustees, who become legal owners of the assets for the benefit of others – the beneficiaries. When it comes to estate planning, trusts can facilitate effective asset transfer while enabling the transferring party to retain, often by being a trustee, an element of control and, in some cases (e.g. as a creditor via the loan trust), access to the assets being transferred while retaining IHT efficiency.
Importantly for many would-be settlors, under a discretionary trust structure the settlor (whose assets are transferred) can give non-binding guidance and ‘expression of wish’ to the trustees as to how the assets should be managed and who should benefit.
AJ Bell offers three types of trusts for use:
- Absolute Gift Trust
- Discretionary Gift Trust
- Discretionary Loan Trust
We will also provide a range of supporting documents for the ongoing administration of the trust as well as adviser and client guides to support selection, implementation, use and education regarding the legal and tax implications of the trust solutions offered.
While the deeds and documents have been confirmed as legally effective to achieve their stated purpose, advisers and their clients should obtain approval from the client’s legal advisers that they will meet their specific needs.