Transact has introduced a new Flexible Reversionary Trust (FRT) to its platform in response to adviser demand for solutions ahead of the 2027 pension IHT rules.
From April next year, unused defined‑contribution pension funds and pension death benefits become fully assessable within an individual’s taxable estate, meaning families will need help to plan for intergenerational wealth transfers.
Transact says it has already seen advisers accelerate their use of bonds and trust‑based strategies for intergenerational planning with the reliance on pensions as an IHT‑efficient vehicle set to diminish.
The new FRT can be used in conjunction with Transact onshore and offshore bond wrappers and is designed to support clients who wish to consider gifting wealth from their estate while maintaining flexibility.
The 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 fall outside the estate after seven years, subject to the usual IHT rules.
The FRT launch sits alongside wider enhancements to the platform, including online set‑up for bonds and trusts, improved chargeable gains support, and ongoing investment in digital workflows.
Andrew Cullen‑Jones, chief development officer at Transact, said: “The changes due in April 2027 that make pension wealth subject to IHT represent the biggest change to financial planning in over a decade.
“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.”
He added: “The launch of our Flexible Reversionary Trust 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.”
