Quilter 7 Chargeable lifetime transfer (CLT) – A gift to a discretionary trust is regarded as a chargeable lifetime transfer. This gift may be liable to inheritance tax (IHT) immediately if the amount (plus any CLTs in the previous seven years) exceed the nil-rate band. The value of the gift will remain in your estate for IHT purposes for seven years from the date of the gift. Nil-rate band (NRB) – NRB is the amount of your estate on which the IHT rate is zero. This is £325,000 and is frozen until the 2026/2027 tax year. Chargeable event – Ta xat ion of the Collective Investment Bond is subject to the chargeable events regime. A chargeable event liability occurs when a gain arises on a specified event. These events include full surrender of policies, death of the last life assured of the Collective Investment Bond or, assignments for consideration and regular withdrawals in excess of the 5% tax deferred allowance. Periodic charge – If, after 10 years, and every subsequent 10 years, the value of the trust fund is more than the current IHT nil-rate band, the trustees may need to pay a periodic charge. If this tax does apply it will be no more than 6% of the value of the trust fund. Exit charge – A potential tax charge on any money paid to beneficiaries may be subject to an exit charge up to 6%. The charge is based on the rate of the periodic charge at the last anniversary and how long it has been since that anniversary. Withdrawals paid to beneficiaries within the first 10 years of the trust’s creation are subject to a different calculation. Your financial adviser can guide you as to whether these charges may apply to your beneficiaries.