Discounted Gift Trust: HMRC Loses

A discounted gift trust DGT, which is used primarily for inheritance tax planning has won another victory against H M Revenue and Customs (HMRC).

The Special Commissioner has ruled against HMRC in a case, which considered whether people aged over 90 can benefit from a discounted gift trust plan.  The case was decided in favour of the executors of an elderly woman who died five months after setting up a discounted gift trust plan with Axa in 2002.

Under consideration was the value of a lifetime gift made by elderly woman.  HMRC argued that the deceased should receive little or no discount as someone of that age would be uninsurable.  The executors of the trust contended that the discount should apply.

Our view

One in the eye for HMRC.  We are all insurable and the discounted gift trust is one of the most effective ways to plan for and reduce inheritance tax.  

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