For financial advisers only
discounted Gift scheme
illustrative tables of discounts –
bare and discretionary versions
Only for use with THE International Portfolio Bond (Redemption and Life)
October 2016
Throughout this document ‘Old Mutual International’ refers to Old Mutual International Isle of Man Limited.
Under the Old Mutual International Discounted Gift Trust, withdrawals can be established on a monthly, quarterly, half-yearly or
yearly basis (subject to minimum withdrawal limits and any minimum Portfolio Fund requirements applicable to the bond) and can
be deferred for up to five years from the start date of the trust. Payments can be level or escalating and are capped at a maximum
withdrawal of 15% of the initial premium each year.
The tables on the following page are based on an initial premium of £100,000.
We have specified both the discount and the value of the gift, which is the amount applicable to the estate for UK inheritance
tax (IHT) purposes.
The basis of the discount assumes several factors including: age, interest and mortality rates, amount of withdrawals
and state of health. The discounts stated overleaf assume a client is in standard health for their age and is a non-smoker.
bare version
The ‘discounted value of the gift’ (the potentially exempt transfer (PET)) indicates the estimated value of the gift into trust for IHT
purposes in the event of the death of the Settlor(s) within seven years of creating the trust.
discretionary version
The ‘discounted value of the gift’ (the chargeable lifetime transfer (CLT)) indicates the estimated value of the gift into trust for IHT
purposes. The CLT may be chargeable at half the death rate of IHT (20%) immediately.
Under the discretionary version, the quoted discounts assume that any immediate tax liability as a result of a chargeable lifetime
transfer has already been paid outside of the investment into the Old Mutual International Discounted Gift Trust.
A further liability may occur in the event of the death of the Settlor within seven years of making the gift into trust. This amount
will fall into the Settlor’s estate for IHT purposes and would be chargeable at a maximum of a further 20%.
There may be additional IHT charges during the lifetime of the trust.
The discounts are purely illustrative and are not guaranteed.
Table 1 – £100,000 invested – 5% level withdrawal, payable yearly
Single Settlor – Male or Female
Age next birthday
Value of interest retained
Discounted value of gift
60
£70,586
£29,414
65
£66,159
£33,841
70
£60,498
£39,502
75
£51,907
£48,093
80
£42,935
£57,065
85
£34,057
£65,943
90
£25,795
£74,205
Table 2 – £100,000 invested – 5% level withdrawal, payable yearly*
Joint Settlors’ proportionate values
Settlor 1
Age next
birthday
Value of interest
retained
Joint Settlors’
combined values
Settlor 2
Discounted value Age next
of gift
birthday
Value of
interest retained
Discounted value Value of interest
of gift
retained
Discounted
value of gift
60
£38,149
£11,851
57
£39,305
£10,695
£77,454
£22,546
65
£36,316
£13,684
62
£37,931
£12,069
£74,247
£25,753
70
£33,854
£16,146
67
£36,121
£13,879
£69,975
£30,025
75
£31,322
£18,678
72
£34,474
£15,526
£65,796
£34,204
80
£26,789
£23,211
77
£30,163
£19,837
£56,952
£43,048
85
£22,005
£27,995
82
£25,420
£24,580
£47,425
£52,575
90
£17,253
£32,747
87
£20,500
£29,500
£37,753
£62,247
*Assumes joint Settlors where Settlor 2 is is three years younger than Settlor 1. Based on ages in columns one and four of this table
Table 3 – £100,000 invested – 5% withdrawal escalating at 2% each year, payable yearly
Single Settlor – Male or Female
Age next birthday
Value of interest retained
Discounted value of gift
60
£81,701
£18,299
65
£74,793
£25,207
70
£66,481
£33,519
75
£56,173
£43,827
80
£45,483
£54,517
85
£35,486
£64,514
90
£26,578
£73,422
The tables above apply to both bare and discretionary versions. All illustrations are based on non-smoker rates.
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Please note that Old Mutual International can give no guarantee that these levels of withdrawals will be able to continue for the entire
lifetime of the client. This will depend on investment performance, the age of the client at outset and the levels of withdrawals taken.
Please see the brochure Your guide to How an Old Mutual Wealth discounted gift trust can help you for an explanation of
the tax treatment of this scheme. The brochure, along with other supporting material, can be found on the literature library at
www.oldmutualinternational.com.
Investors should be aware that the value of unit-linked contracts is not guaranteed as the price of units may fall as well as rise.
This document is based on Old Mutual International’s interpretation of UK and Isle of Man law and HM Revenue & Customs practice
as at 23 May 2016. While we believe this interpretation is correct, we cannot guarantee it. Tax relief and the tax treatment of
investment funds may change in the future.
This communication is designed for and directed at professional financial advisers. No other person should rely upon the information
contained within this communication.
www.oldmutualinternational.com
Calls may be monitored and recorded for training purposes and to avoid misunderstandings.
Old Mutual International Isle of Man Limited is registered in the Isle of Man under number 24916C. Registered and Head Office: King Edward Bay House, King Edward Road,
Onchan, Isle of Man, IM99 1NU, British Isles. Phone: +44 (0)1624 655 555 Fax: +44 (0)1624 611 715.
Licensed by the Isle of Man Financial Services Authority.
Old Mutual International Isle of Man Limited is a member of the Association of International Life Offices.
Old Mutual International is registered in the Isle of Man as a business name of Old Mutual International Isle of Man Limited.
When printed by Old Mutual this item is produced on a mixed grade material, which uses a combination of recycled wood or paper fibre from controlled sources and virgin fibre
sourced from well managed, sustainable forests.
SK4651/INT16-0214/October 2016
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