LIFE INTERESTS & REVERSIONARY INTERESTS

Specialist financial intererests are now handled by our sister company H.E. Foster & Cranfield Ltd. For more information and contact please visit their specialist website hefostercranfield.co.uk.

What are life interests and reversionary interests?

Life interests and reversionary interests most commonly arise under the terms of a trust. For example, under a will, assets may be placed in trust with income from those assets being paid until the death of a surviving spouse: upon the death of a surviving spouse, the asset will “revert” to the estate of the testator and subsequently be passed to the nominated beneficiaries of the testator (e.g. grandchildren or a charity). The surviving spouse is said to have a life interest in the assets of the trust and, while the surviving spouse is still alive, nominated beneficiaries are said to have a reversionary interest in the assets of the trust.

Often the beneficiaries of the trust may decide they want to wind up the trust and distribute its assets. The trustees will usually want to take independent advice on the appropriate division of assets between the different beneficiaries. Foster & Cranfield provide such independent advice.

Alternatively, where there is not an agreement between the beneficiaries about winding up the trust or if, for example, the surviving spouse lives in a property owned by the trust which makes winding up the trust impossible, one of the beneficiaries may want to sell their interest in the trust. Since a reversionary interest provides no immediate tangible benefit, reversioners often choose to sell their interests for a capital sum.

Why invest in a reversion?
•	Long term capital investment with capital appreciation
•	No risk to capital

Why sell a reversionary interest? • Top up retirement income • Pay for nursing or residential care • Inheritance tax planning • Capital gains tax planning • Divorce settlement • Pay off debt

Contact:
Please click through to our sister company website hefostercranfield.co.uk