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Pilot trust meaning

What does Pilot trust mean?
In practice, a pilot trust is a lifetime trust constituted with a nominal sum (commonly £10/€10) so the settlement exists in advance and is ready to receive the main assets later (for example, by will, assignment, life policy or pension death benefits). The term is a descriptive expression used across England & Wales, Scotland, Northern Ireland and Ireland; it is not defined in legislation or case law. Although minimally funded at the outset, the trust is valid and operative from creation, with trustees appointed and terms in place, and is used to pre‑package succession, ring‑fence classes of assets or beneficiaries, and streamline estate and wealth planning. In the UK, most pilot trusts are discretionary and fall within the inheritance tax relevant property regime. Following Finance Act 2014, the “same‑day additions” rules mean that using multiple pilot trusts to mitigate periodic and exit charges is now largely ineffective; limited grandfathering may apply to pre‑10 December 2014 settlements without later additions. A single pilot trust can still be appropriate where targeted control or administrative convenience is required. Usage in Scotland and Northern Ireland is broadly consistent with England & Wales, though trust formalities differ. In Ireland, similar practice exists but CAT, CGT and stamp...
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NEWS
Family law weekly roundup (England and Wales): public and private children, financial remedies, and Court of Protection—case law, practice guidance updates and alerts

In this issue: Public children Financial provision Private children Court of Protection Daily and weekly news alerts New content Updated content New Q&As LexTalk®Family: a Lexis®Nexis community Useful information Public children Suspected Inflicted Head Injury Service (SIHIS) for children pilot Three NHS Trusts—Manchester University NHS Foundation Trust, Birmingham Children’s Hospital and Sheffield Children’s NHS Foundation Trust—have received funding to launch pilots and evaluate a new Suspected Inflicted Head Injury Service (SIHIS). The service is designed to tackle delays arising from late and multiple expert medical statements. The trial will assess how this model can drive lasting, system-wide improvements that cut delay, with the pilot scheduled to conclude on 31 March 2025... Anonymisation (Re T (Children: Publication of Judgment)) In Re T (Children: Publication of Judgment) [2024] EWCA Civ 697, [2024] All ER (D) 79 (Jun), the Court of Appeal upheld the mother’s appeal against a decision concerning the publication of a...

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NEWS
UK pensions regulatory update: TPR’s new DC/master trust supervision, ACA framework to unlock DB surpluses, Gen Z retirement risks, plus key dates and practical trackers

In this issue: The Pensions Regulator Funding, surplus and investment Members and benefits Daily and weekly news alerts Dates for your diary Trackers The Pensions Regulator TPR enhances oversight of the largest DC schemes to improve member outcomes The Pensions Regulator (TPR) has unveiled enhancements to its supervision of master trusts and defined contribution (DC) schemes after a 12‑month review. The redesigned model groups schemes into four supervisory segments with bespoke engagement to spot risks sooner and lift saver outcomes. These cover monoline, commercial and non‑commercial master trusts; collective DC schemes; and single plus connected employer DC schemes. TPR’s priorities are securing value for money for all savers and setting clear expectations on investments, data quality and at‑retirement innovation. Larger schemes will be supported by dedicated multi‑disciplinary teams to enable more targeted, expert‑level interactions. The change marks a tilt towards a more prudential regulatory stance, addressing scheme‑specific and market‑wide risks across the UK pensions landscape. TPR said...

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NEWS
Family law weekly update (England and Wales): FPR PD 36ZI; ES2 revised; open justice; domestic abuse findings; CA 1989 s37/s20; sibling contact; Hague returns; surrogacy; financial remedies incl Standish.

In this issue: Practice and procedure Emergency procedures Public children Private children Financial provision International children Daily and weekly news alerts Updated content Useful information Practice and procedure Family Procedure Rules 2010 Practice Direction Update No 2 of 2025 The second Practice Direction Update to the Family Procedure Rules 2010 (FPR 2010) in 2025 has now been published. It revises FPR 2010, PD 36ZA and introduces a further Practice Direction, FPR 2010, PD 36ZI, which will take effect on 14 July 2025. The new Practice Direction, FPR 2010, PD 36ZI, augments FPR 2010, SI 2010/2955, r 36.2 (Transitional Arrangements and Pilot Schemes) to support a pilot for notifying the police whenever the court makes, varies, or extends a relevant non-molestation order. Under the pilot, notification to the police will be delivered by automated electronic means or by email once a relevant non-molestation order has been made. Consequential amendments to FPR 2010, PD 36ZA remove,...

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View the related Practice Notes about Pilot trust

PRACTICE NOTES
Private Client Glossary (England and Wales): Wills, Probate, Trusts, Capacity and UK Taxation

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

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PRACTICE NOTES
ADR Tracker: Court-ordered ADR post-Churchill, CPR reforms and mandatory small claims mediation (England and Wales)

This Tracker outlines key developments for dispute resolution lawyers on the integration of alternative dispute resolution (ADR) into the civil litigation system in England and Wales. For wider tracking of dispute resolution issues, see Practice Note: Tracker—legislation, consultations and other developments—Dispute Resolution. The development of compulsory ADR Since the Court of Appeal’s decision in Halsey v Milton Keynes General NHS Trust, discussion has persisted about whether a court may require or order parties to attempt settlement via ADR, and whether cost sanctions can be applied to those who unreasonably refuse to engage with ADR. In Halsey, the Court of Appeal considered it inappropriate for the court to compel parties to refer their dispute to ADR against their wishes, as doing so would ‘impose an unacceptable obstruction on their right of access to the court’. In July 2021, the Civil Justice Council (CJC) published its report, ‘Compulsory ADR’, concluding that compulsory ADR is not unlawful, in that it is not incompatible with Article 6 of the European Human Rights...

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PRACTICE NOTES
Practice guide to discretionary trusts: nature, use, exhaustive vs non-exhaustive, drafting clauses, beneficiaries, powers, perpetuity, letter of wishes, pilot trusts, tax (England and Wales)

The nature of a discretionary trust Underhill and Hayton: Law of Trusts and Trustees offers a clear account of what marks out a discretionary trust. Such a trust exists where beneficiaries’ shares are not predetermined but hinge on the use of discretionary dispositive powers held by trustees or other authorised holders. A straightforward illustration is a settlement under which assets are placed with trustees to divide the income among such of A’s children and grandchildren as they consider appropriate. Less intuitively, the label also applies where beneficiaries hold fixed distributive rights that can nevertheless be defeated if a power is exercised to appoint the property to another person (see Underhill and Hayton—Fixed and discretionary trusts [5.5]). In a discretionary trust, the trustees are empowered to pay or apply income, capital, or both, to or for the benefit of all, or any one or more, to the exclusion of others, within a defined class or group of persons...

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