Benefits Of Section 73 Trusts

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What is a Section 73 Trust?

A Section 73 policy is a monthly Savings / Investment Policy that an Individual or Couple can set up in order to reduce Gift Tax (currently 33%) in the future.

Here are some of the benefits of Section 73 Trusts;

• Gift Tax Deferral

• No immediate Capital Acquisitions Tax (CAT) is due when assets are placed into the trust.

• CAT is only payable when beneficiaries receive a benefit.

• This gives control over timing and helps manage or reduce tax liabilities.

  
  

• Tax-Efficient Growth (via Gross Roll-Up)

• Investments held in the trust (e.g. life assurance bonds) can grow in a gross roll-up structure, meaning:

• No annual income or capital gains tax.

• More compounding and potentially higher long-term value.

• Only exit tax applies on encashment or every 8th anniversary.

• Protects Beneficiaries

Useful for;

• Minor children

• Vulnerable individuals

• Beneficiaries at risk (e.g. from divorce, addiction, or financial irresponsibility)

• Trustees control when and how funds are distributed.

  
  

• Long-Term Planning (up to 80 years)

• The trust can last for up to 80 years, allowing for multi-generational wealth planning.

  
  

• Control and Flexibility

• The settlor (person gifting the asset) retains influence via:

• Trustee appointments

• A letter of wishes

• Trustees can respond to changes in family needs, laws or asset values.

  
  

• Supports Structured Gifting

• Allows for regular gifting into the trust over time, not just lump sums.

• Helps spread use of CAT thresholds and exemptions more effectively.

  
  

• Asset Protection

• Assets in trust are legally separate from the beneficiary’s estate.

  
  

• Shields family wealth from:

• Creditors

• Divorce settlements

• Spendthrift behaviour.

  
  

Summary:

Section 73 trusts offer flexible, tax-efficient gifting while protecting family wealth and giving trustees long term control over distributions - ideal for structured and sensitive estate planning.

Contact us today and book your consultation and see how Quigley Financial Brokers can

help you choose the best options available.