Reduce Inheritance Tax
Published / Last Updated on 24/04/2010
by Ashley Clark, Director
Royal London 360° is launching a trust that aims to reduce the value of an individual’s estate for inheritance tax purposes.
Royal London select Discounted Gift Trust (DGT), a similar trust to those offered by a range of investment companies, is trust-based rather than product- based to allow greater investment flexibility and can be used in conjunction with the Royal London 360° selected investment bond.
There are options to defer income or to provide an income for the lifetime of the settlor - the person setting up the trust (or until such time as the trust fund in exhausted). Unusually, this DGT accepts further transfers after the trust has been created when many others do not.
In addition, alongside the trust, it is possible to set up an access fund which allows an investor to set aside a certain proportion of capital which is held by the trustees in order to meet future unforeseen spending needs.
If the access fund is found to be too large or no longer required, this capital can be gifted to the trust fund for the beneficiaries, further reducing the size of the settlor’s estate for inheritance tax purposes.
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