Can a Settlor be uninsurable and still get a discount on a Discounted Gift Trust?
It is a commonly held belief that if a Settlors’ life is considered uninsurable a discount would not be given on application for a Discounted Gift Trust (DGT). It has long been held that someone aged 90 years is ‘automatically’ uninsurable and so a discount would not be granted at all. Indeed I can remember an exam question along these same lines! Mrs Bower died 5 months after making a gift to a DGT with a declared discount of £7,800. A key issue was that Mrs Bower was aged 90 at the point she made the gift to the trust. The point of contention related to the value of the lifetime gift made by Mrs Bower, when she set up the DGT. HMRCs’ initial view was that someone aged 90 or over would receive little or no discount since someone of that age would be uninsurable. The executors of the late Mrs Bower countered this position arguing that a discount could apply. However, in its Notice of Determination issued to the executors HMRC revised the valuation to £250. The Special Commissioner acce
