A trust is a centuries-old way of investing your money for you and your family’s benefit, to protect your accumulated wealth and to ensure that your wealth is passed on to your children and grandchildren in the most tax efficient way. They can also reduce your inheritance tax bill.

With the Pro Sports Trust, your surplus net income will buy UK authorised and regulated investments that are placed into the trust and which are then managed by Trustees, in conjunction with your Financial Advisers.

The Trustees are appointed to safeguard and manage the investments. You can decide in advance who benefits from the money in the trust, these people are called the beneficiaries. To do this, and with help from your Financial Adviser, you can complete a Letter of Wishes, which whilst not legally binding, gives your Trustees guidance on who you would like to benefit from the Trust Fund and when. Your spouse or civil partner cannot be made a beneficiary until you die, after which the Trustees can start to make capital payments to them if they wish. The Pro Sports Trust also allows you to get access to the money in the future, which makes it particularly useful for professional sports people who earn a large amount of money in a relatively short space of time and need to manage that income for the future.

There are several good reasons to put your money into the Pro Sports Trust which includes:

• It can be returned to you in a structured way as and when you need it.*
• It can be protected should your personal circumstances change.
• It can be loaned to people you nominate (such as your family).*

*At the discretion of your Trustees

The trust makes use of an exemption allowed by HM Revenue & Customs, called the ‘normal expenditure out of income’ exemption.

It allows you to ‘gift’ your excess income into a trust where it becomes exempt from inheritance tax straightaway, as long as you can prove the:

• Money comes from your net income (not capital).
• Intention is that the gifts will be regular (typically monthly or annually).
• Gifts do not reduce your standard of living.

This exemption is not automatically given by HMRC, but can be claimed by your accountant or financial adviser. HMRC will need detailed records of your income and expenditure so that your representatives can claim this exemption, but your financial adviser and accountant can keep these records for you.

Gifts to the trust can include income from, salary, sponsorship, image rights, bonuses, prize money, your pension, rents, dividends; and interest from ISAs. Income is interpreted as net income after payment of Income Tax.

Any investments left in the trust can be distributed or continue to be held within the trust. With your wishes in mind, your Trustees can use their discretion to make loans to your children, grandchildren and spouse or civil partner.

To Qualify for the “Pro Sports Trust” you need to:

Be either domiciled or resident in the UK for tax purposes.

Have excess income and be able to make regular payments.

Are willing to transfer ownership of your money to a professional trustee.

Allow the professional trustee to make investment decisions on your behalf, following recommendations received from your financial adviser.

Are willing to accept that the value of the trust may fall in value, as well as rise.

Access to your money:

You do not need an immediate income, unrestricted access to the money or access to money for at least five years.

In the event of a career changing injury or when you retire from your chosen professional sport, you can request access to the trust money.

If you, or your family, do not need access to the money, it can remain invested via the trust.

If you wish to pass money to your family from the trust, you can make a request to the professional trustees.

Please Remember:
The price of shares and the income from them can go down as well as up as a result of changes in the value of the underlying investments and currency movements. An investor may not get back the amount originally invested. Past performance is not necessarily a guide to future returns.

WAY have undertaken considerable correspondence with HMRC and sought legal opinion from leading UK Tax Counsel (which is available to Advisers) to ensure the effectiveness of the Plan. During the last few years there have been changes to legislation but on each occasion the Plan has remained unaffected.

Your money will be invested into mainstream UK regulated investments and will not get tarred with the controversy from recent years that embroiled many celebrities.

The rules governing the ‘normal expenditure out of income’ exemption were introduced in 1984. The WAY Pro-Sports Trust does not exploit ‘loopholes’ in tax legislation, it simply complies with legitimate, long standing, HMRC accepted, rules that have now been in place for over 35 years. As described in ‘ Why is this trust exempt from Inheritance Tax?’ section (above), detailed income and expenditure records will need to be kept by your accountant or financial adviser to claim the Inheritance Tax exemption when you die.’