CLERICAL Medical has launched a Discounted Gift and Income Plan (DGIP) that assists clients in reducing their inheritance tax (IHT) liability. It allows the client to nominate the trust beneficiaries, while retaining rights to an income from it. The plan will appeal to those seeking to reduce their potential IHT burden, while avoiding the costs and reporting requirements of discretionary trust arrangements.
Unlike the discretionary DGIP, the new plan avoids the immediate 20pc IHT charge for investments in excess of £300,000. As such, it is similar to a ‘bare trust’, though the latter has no retained income rights. Nick Williams, chartered tax adviser at Clerical Medical, said: This new DGIP retains income for the client whilst preserving the fund for the beneficiary, but without the IHT charges and reporting of the discretionary trust.” The plan is likely to prove popular, given the importance of efficient IHT planning. And, with the value of many people’s assets, particularly their houses...
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