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Inheritance Tax Solutions - Discounted Gift Trust

Discounted Gift Trust

How can I protect my assets from Inheritance Tax but still have an income to live on?

Client Circumstances

  • Mr and Mrs Simons are both aged 68
  • Their estate exceeds the IHT exempt amount by £150,000
  • 3 children as main beneficiaries
  • Can afford to gift £100,000
  • Would still like to receive some income from capital
  • If they do nothing their IHT bill will be approximately £60,000 (7.5% of assets)

Recommended Solutions

  • £100,000 into a Discounted Gift Bond
  • Family solicitor as one of the Trustees
  • 3 children as sole beneficiaries

Benefits from advice given

  • £60,000 falls out of estate immediately
  • Immediate IHT saving of £24,000
  • Remaining £40,000 exempt after 7 years
  • Saving a further £16,000 IHT
  • All future growth will fall outside of estate
  • Will receive £5,000 pa tax deferred income
  • Total IHT saving after 7 years £40,000

Talk to us now!

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Future Servicing

We will look to carry out a regular review of your circumstances, objectives, needs and portfolio performance to ensure all arrangements continue to be suitable and advise of any changes that may be appropriate.

This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.

IHT Solutions Helper Will you have to pay Inheritance Tax?

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