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Where Taxpayers and Advisers Meet

Discounted Gift Trust

langtonbrow
Posts:64
Joined:Tue Mar 10, 2009 1:52 pm
Discounted Gift Trust

Postby langtonbrow » Thu Jul 07, 2022 12:05 pm

Does income from a discounted gift trust require declaration in the course of filling out SA100?

For information the trust is operational and paying out £x per month as a carve-out of a collective investment bond with tax liability covered within the product.

kind regards
L

Feds
Posts:59
Joined:Wed Aug 06, 2008 4:10 pm

Re: Discounted Gift Trust

Postby Feds » Tue Jul 12, 2022 6:11 pm

No. Any withdrawals made are technically “return of capital” as a collective investment bond is a non income producing asset.
Any withdrawals made which are within the cumulative 5% pa tax deferred withdrawal allowance do not result in a chargeable event and therefore do not need to be included in a tax return.
Where a chargeable event does occur (i.e. on death of the last life assured, when the bond is surrendered or where withdrawals exceed the cumulative 5% allowance etc), then the relevant figures need to be included in the relevant individual’s tax return.
Note, any ongoing adviser charge paid to a financial adviser counts as part of the 5% allowance, but the life company will be able to tell you if the 5% allowances have been exceeded, resulting in a chargeable event.

langtonbrow
Posts:64
Joined:Tue Mar 10, 2009 1:52 pm

Re: Discounted Gift Trust

Postby langtonbrow » Wed Jul 13, 2022 2:00 pm

As I thought, but with specific and sound technical reasons why.
Many thanks for this very clear answer.


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