On my death, is any part of the trust fund subject to IHT? Assuming you have lived for seven years since making the gift into the discounted gift trust, then no part of the trust fund will be subject to IHT. Any growth on your investment will be outside of your estate from day one. You must be aware that the trust fund may be subject to periodic and exit charges. However, if you were to die within seven years, then the value of the discounted gift will be subject to IHT. Your IHT liability may still be reduced using what is known as taper relief where the gift, along with previous gifts, is larger than your available nil-rate band. Taper relief only applies to the amount of your gift that is above your available nil-rate band. Its effect is shown in the table. Do I need to report my gift to HM Revenue & Customs? As the gift is a chargeable lifetime transfer (CLT) there is a requirement to report the gift where it exceeds 80% of the current nil-rate band, taking into account the current CLT and all transfers made in the previous seven years. It is important that you keep a copy of the discount letter you will receive from us and any supporting evidence. This is because, if you die within seven years, HM Revenue & Customs may request information from your executors or legal representatives to verify the discount value, ie the amount of the gift which was deemed to be immediately outside your estate for IHT purposes. Trust registration A trust must register with HMRC’s Trust Registration Service if it is considered UK resident or has a UK tax liability, unless an exemption applies. – Trusts created before 1 September 2022 must register by the later of 1 September 2022 or within 90 days of the date of the trust deed. – Trusts created on or after 1 September 2022 must register within 90 days of the date of the trust deed. Further details regarding trust registration can be found here: platform.quilter.com/TrustRegister The discounted gift trust 14 Other considerations Taper relief Years between making a gift and dying Proportion of 40% inheritance tax payable 0-3 100% 3-4 80% 4-5 60% 5-6 40% 6 -7 20%