Tax planning

Question 1

What is a loan trust? (3)

Answer 1

• Placing future growth on assets outside the estate without losing access to the original capital
• interest free loan is made to the trust by the settlor
• as is is a loan and not a gift then there is no transfer of value for IHT

Question 2

What is a discounted gift trust?

Answer 2

• A way to immediately reduce the value of the estate
• GIft of capital under trust to beneficiaries whilst retaining the right for the settlor to receive a fixed income by way of capital replacements for life
• ADD IN the rest