Transferring assets into a Discounted Gift Trust enables the settlor (the person making the gift) to plan a reduction in the value of their estate for inheritance tax purposes, whilst retaining access to the assets by way of regular income by the return of fixed capital repayments. The trust is suitable for individuals who have a liability to IHT and are happy to make substantial gifts, but need access to regular payments to maintain their standard of living.

The Discounted Gift Trust has an added benefit in that part of the capital (the discount) is outside your estate from day one. The size of the discount that you may receive depends on your age, gender, health and the amount of income you decide to take. Once you have set up a Discounted Gift Trust you cannot receive your capital back or alter the level of income you have chosen at outset.

Speak to our Exeter IFA team to find out more.