Discounted Gift Trusts

This special kind of Trust, which is growing increasingly popular, can not only provide you with an lifetime income at retirement, but also protect your estate from Inheritance Tax (IHT).

It means an individual (known as the Settler) can effectively make a lifetime gift, without attracting an immediate IHT liability.

So as an IHT-friendly alternative to an Annuity, the Discounted Gift Trust specifies the level and regularity of cash payments you will receive for the rest of your life. And although you can receive no other benefits from the Trust other than these payments, once in place for seven years there will be no tax to pay on your death. It's still a tax -efficient option, and can be set up on a single or joint-life basis.

How do we know it works?

The Discounted Gift Trust uses principles that are accepted by the Revenue; in other words this arrangement has been tested, successfully, on many occasions.

What kind of immediate tax saving will I achieve?

This depends on several factors, but mainly on your life expectancy and age at the time you set up the Trust. We will ask you some questions about your health, and depending on the answers, the Underwriters will offer the potential discount on the investment. This is nothing to worry about - the objective is to obtain an accurate "snapshot" of your health at time of setting up the Trust, so that there is evidence to present to the Revenue later, should it be needed. Any potential discount is proportionate on each person.

There may be occasions when a Discounted Gift Trust is not the best solution for your particular circumstances. As these are long-term decisions, you should always seek qualified advice.

Get the full story

Robert Bruce Associates can offer you specialist, helpful and clear advice on Trusts of this type, to help you make an informed choice. Our qualified advisors will ensure any decision is made only once you have all the facts in hand, and only as a result of establishing your personal wishes and criteria.

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