Skandia Ireland has launched a discounted gift trust (DGT) and a loan trust which it said can help UK clients mitigate inheritance tax liability.
The DGT allows UK-domiciled investors to gift money into trust but keep the right to withdraw an income for life from the gift. The value of the income stream is then discounted against the gift, reducing the inheritance tax eventually due on it, Skandia said. Skandia's loan trust allows investors to make an interest free loan, repayable on demand, to the trust. The value of the loan remains within their estate. Growth on the loan, invested in a single premium bond written in trust for selected beneficiaries, is not liable to inheritance tax. Rachael Griffin, head of product law...
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