HM Revenue & Customs (HMRC) has provided clarification on its treatment of Discounted Gift Schemes.
Commenting, Gerry Brown, technical manager at Scottish Life International, said: “This technical note will help clear up the confusion surrounding the value of transfers to discounted gift trusts. This clarity is important because following the changes to the inheritance tax treatment of trusts introduced last year, the value transferred triggers an immediate inheritance tax charge, subject of course to the availability of annual exemptions and the nil rate band. It is vital that this charge be established as accurately and as quickly as possible as it will have a continuing impact on the inheritance tax position and will be of relevance in developing additional planning strategies.
“Financial advisers and their clients will have the confidence of knowing that transfer values quoted by life offices will stand up to HM Revenue & Customs scrutiny, provided of course that full disclosure of the relevant factors has been made.”
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