Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

One lump or two?

28 September 2010 / John Woolley
Issue: 4274 / Categories: Comment & Analysis , Inheritance Tax
JOHN WOOLLEY explains the current tax situation applying to lump sum inheritance tax schemes


  • The application of the DOTAS rules to IHT schemes.
  • Will the use of two well-known schemes need to be disclosed?
  • Advantages and disadvantages of the discounted gift trust and the loan trust.
  • The potential downsides of these plans must be considered at the outset.

In the pre-Budget report in December 2009 the then Labour Government announced the introduction of provisions (including draft legislation) to target two trust-based inheritance tax (IHT) schemes.

The main aim of these schemes was to transfer property into a relevant property settlement (e.g. a discretionary trust) at a much depressed value for IHT purposes.

Thus the 20% entry charge on transfers that exceeded the nil-rate band could be reduced or avoided. At the same time as announcing the anti-avoidance provisions the Government announced that it would consider wider solutions...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon