That a Discounted Gift Trust can be a good idea - if it is set up properly. 

If you want to get an immediate saving on Inheritance Tax and still get an income, then a Discounted Gift Trust can be a good idea. 

 

However these are normally set up on a discretionary basis but that uses up part of your lifetime allowance for Inheritance Tax.  We suggest that you have your Discounted Gift Trust set up on an Absolute basis which means that your lifetime allowance for Inheritance Tax is not affected.

 

As an example, if you invest £100,000 into a Discounted Gift Trust you will normally take 5% withdrawals i.e. £5,000 per annum.

 

Depending on your age and health 30% of that might be immediately exempt from Inheritance Tax.  And the rest is exempt after the usual 7 year period.

 

Everyone’s circumstances are different and it is important that you get advice particular to your circumstances.

 

To find out what we can do for you just call 0800 852 1999 or email us at contactus@mcclure-solicitors.co.uk.

 

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