A guide to the latest hot topic – INHERITANCE TAX

This includes how to set up a DGT. If you don’t know the answer to the question below, then you need to buy it.

At what point is the total capital value of the sole settlor’s interest under a Discounted Gift Trust arrangement assessed for inheritance tax on his estate?

a. On settling the trust

b. On the death of the settlor

c. Day before death of the settlor

Answer is a. This is the only time the income has a capital value attributable, which determines the discount, thereafter the settlor merely has a ‘right’ to future income.

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