Discounted Gift Trust (DGT)

The RL360 Discounted Gift Trust (DGT) allows UK domiciled individuals to gift a plan into a trust, receive an income and immediately reduce the value of their estate for UK Inheritance Tax (IHT) purposes. It can be established on a Bare or Discretionary Beneficiary basis. 

The trust allows for both a Gifted and an Access Fund to be created. 

The creation of the Access Fund is optional and is essentially a ‘rainy day’ fund which provides the settlor with access to capital should unforeseen circumstances occur. If in the future, the settlor decides they no longer require access to this fund, it can be gifted to the trust to be held for the benefit of their nominated beneficiaries. 

RL360’s DGT is trust based as opposed to product based which provides flexibility if the trustees should decide to change the underlying assets.

General features of the RL360 Discounted Gift Trust

• it can be established with single or joint settlors
• the settlor is automatically included as a trustee
• the trust can accept increments to the trust fund whilst the settlor is still alive and these can be used to top-up income. Furthermore, these further gifts can also be discounted subject to a satisfactory underwriting outcome
• the trust allows the settlor the option of creating an Access Fund
• the trust will avoid Isle of Man Probate assuming there is a remaining trustee alive at the time of the death of the last life assured on the plan.

The RL360 Discounted Gift Trust may be suitable for individuals who

• are UK domiciled or deemed UK domiciled for UK IHT purposes
• are looking to reduce the value of their estate for UK IHT purposes and are prepared to make a gift so long as their standard of living can be maintained
• can afford to gift away any potential growth on their existing capital
• are in good health
• require an immediate reduction in UK IHT
• require access to pre-determined capital payments from the trust
• are not confident about gifting away all of their disposable capital and would like the ability to retain access to some of it should unforeseen circumstances occur.

Visit our Trust Information & Downloads page for more information and downloadable literature about our trust range.

Important Notes 

Please note that every care has been taken to ensure that the information provided is correct and in accordance with our current understanding of the law and practice at HM Revenue and Customs (HMRC) as at June 2019. You should note however, that we cannot take on the role of an individual taxation adviser and independent confirmation should be obtained before acting or refraining from acting upon the information given. The law and HMRC practice are subject to change. Legislation varies from country to country and the plan owner's country of residence may impact on any of the above.