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Review summary

Gift Trust

A gift trust provides an IHT planning route for those who want to make an outright gift in a tax-efficient way.

Some individuals are averse to making substantial gifts directly to individuals who are still minors, for example if they have young children.

For example, they may want the children to inherit the money at an age when they are more financially mature, or they may want to gift away money without it affecting their spouse’s access to the funds.

Customer Reviews
Expert Verdict

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.


The Pros

> Potential IHT planning benefits if used correctly

The Cons

> Potentially expensive
> Seek highly qualified, specialist advice
Should I use a Gift Trust if I will need access to my assets?


A Gift Trust should not be used if you may need access to your  capital.

If you require access, other solutions may offer some protection from inheritance tax (IHT).

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Expert Assessment of a Gift Trust

A Gift Trust can be a useful solution, but whether it is applicable has to be determined on a case-by-case basis.

The case for using trusts in general also needs careful consideration on an individualised basis.

If you already have a trust structure in place and would like a second opinion - or, if you are wondering whether the utilisation of a trust could be of benefit in your personal circumstances contact our trust experts for comprehensive, highly qualified advice.

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