Discounted Gift Schemes

Interest Rate Change from 1st September 2007

In the Technical Note issued on 2nd May 2007 we advised that the valuation basis used by HMRC would be kept under review and that any future changes to the valuation basis would be published on the HMRC website. The purpose of this announcement is to give details of a change to the valuation rate of interest to be used from 1st September 2007.

Since the publication of the Technical Note in May 2007 both the Bank of England Base Rate and yields on Gilts have continued to rise. In the light of these increases, HMRC proposes to increase the valuation rate of interest used in connection with valuing the retained rights under discounted gift schemes to 6.75% from 1st September 2007. This returns the differential over short term Gilts to 1% as at 13th July 2007.

Any enquiries regarding this change should be directed to:

• Phil Oxlade
  Board’s Actuarial Officer
  Charity, Assets & Residence
  Actuarial Group
  Ferrers House
  PO Box 38
  Castle Meadow Road
  Nottingham
  NG2 1BB
  Tel: (0115) 9742950
  
  or,
• Ian Hempstead
  Assistant Actuarial Officer
  Charity, Assets & Residents
  Actuarial Group
  Ferrers House
  PO Box 38
  Castle Meadow Road
  Nottingham
  NG1 1BB
  Tel: (0115) 974 2939