IHTM20424 - Discounted Gift Schemes: Basic scheme

Discounted Gift Schemes are single premium investments. They essentially comprise a gift (Potentially Exempt Transfer ( IHTM14024)) in the form of a settlement with certain “rights” being retained by the donor. The retained rights are usually of two types

• a series of single premium policies maturing (usually) on successive anniversaries of the initial investment or on survival, reverting to the settlor, if they are alive on the maturity date, or
• the settlor carves out the right to receive future capital payments if they are alive at each prospective payment date.