The discounted gift trust 16 The ‘discount letter’ explained When you receive your ‘discount letter’ from your financial adviser, it will contain the following information. Your financial adviser will be able to guide you through this and explain the illustrative discount before your discounted gift trust is underwritten. This shows the investment you have made into the Collective Investment Bond. This shows the percentage of the premium paid to the Collective Investment Bond you have requested as withdrawals each year. This amount will be paid in instalments throughout the year at your chosen frequency. This is the estimated ‘discount’, based on the number of withdrawals we estimate will be needed during your lifetime taking into account your life expectancy. For joint settlors, this shows the combined discount. For UK IHT purposes this value will be proportioned and based upon individual life expectancy. This is the value of your investment less the discount. It is the value of the potentially exempt transfer (PET). Terms of the settlor’s income Premium Discounted value of gift Value of interest retained