A gift trust enables an individual to make a gift without relinquishing full control over the assets gifted.
The trust can be established with single or joint settlors, and a settlor is not automatically included as a trustee. Furthermore, the settlor is not a beneﬁciary.
The gift trust is suitable for individuals who are UK domiciled or deemed UK domiciled for IHT purposes, who can afford to gift capital with no requirement for future access to it.
Alternatively, establishing the trust as a bare trust would be suitable for individuals who want to create a potentially exempt transfer for IHT purposes, and who want to avoid reporting requirements to HMRC, and who have speciﬁc beneﬁciaries in mind.
Establishing the trust as a discretionary or flexible trust would be suitable for settlors who want to create a chargeable lifetime transfer for IHT purposes and who need to retain ﬂexibility regarding their future choice of beneﬁciary.