Case study: How to use discounted gift trusts effectively

Many clients have an inheritance tax (IHT) problem that, in theory, can easily be solved: make substantial gifts and live for seven years. In practice, however, most clients cannot afford such a simple solution. They have investments that they rely on in maintaining their standard of living. What they need to do is get investments out of the estate but retain the ability to receive regular payments from them for the foreseeable future. But how can they achieve this without creating a gift with reservation (GWR) or offending the pre-owned assets tax (POAT) legislation? Ideally, they wo...