CanInvest Select Account Discounted Gift Trust

For your clients who want an income and to reduce their inheritance tax liability

Investing money into a trust can sometimes mean that the client loses access to the income that a lump sum can offer and in some instances this income may be valuable, for example if it is supplementing income later in life.

The Discounted Gift Trust option under the Select Account from Canada Life allows your clients to invest a lump sum of money and to receive regular payments from the trust. These payments can be made monthly, quarterly, half-yearly or yearly depending on the client’s requirements. As these payments utilise the tax deferred withdrawal facility from an investment bond, there is usually no immediate tax liability.

The capital value of the income scheme, called the discount, is outside of the client’s estate immediately with the balance of the payment being a chargeable lifetime transfer or a potentially exempt transfer depending on what type of trust is used. This means that the whole investment can be outside the client’s estate after seven years and the growth is outside from outset.

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  • The Account offers a simple, transparent charging structure.
  • The potential inheritance tax payable on death can be reduced immediately, with a further reduction after the client has survived seven years from the original investment.
  • There is unlimited free switching between the funds available allowing you and your client to restructure the investment as required.
  • After death, the value of the trust will be available. Depending on the type of trust used, the trustees can pay these funds out to the chosen beneficiaries or maintain the trust and pay out benefits as and when they chose.
  • A comprehensive phased investment facility is available allowing money to be moved between different investment funds over a required period of time.

The Select Account DGT allows you and your clients to tailor an investment to their objectives, both now and in the future. Our investment solution has been achieved through our rigorous fund selection and governance process; drilling down through thousands of funds that are available today – refining the options into a high quality range, allowing you and your clients to select suitable investments.

The Select Account Discounted Gift Trust will appeal to UK investors who want to combine a simple tax-efficient investment and reduce the inheritance tax liability on their estate whilst receiving regular payments to supplement their income.

The value of investments can fall as well as rise.

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This website is for UK professional advisers only and is not approved for use by private customers.

Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.