Overview
The client gifts money to a trust and receives regular fixed capital payments for the whole of their life or until the fund runs out – no discretion to change beneficiaries.
Quick facts
- For use with the Collective Investment Bond.
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This is a trust which your client, the settlor, creates by means of a gift, but under the terms of which they retain the right to receive certain ‘income’ payments.
- These payments may continue for the whole of their life, or until the fund has been exhausted.
- Depending on the age and health of the settlor, and the amount of income required; there may be an immediate saving for inheritance tax (IHT).
- The settlor chooses their trustees. They can also appoint themselves as a trustee.
- The beneficiaries are named by the settlor at outset and cannot be changed later.
Suitability
Technical support
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IHT planning and a discounted gift trust - This article provides information about inheritance tax planning for UK-domiciled individuals, where a gift has been made and the individual still requires access to withdrawals.