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Discounted Gift Bond

Lincoln Financial Group

Type: Lincoln’s new Discounted Gift bond is linked to a Discounted Gift trust that enables parents to move money out of their estate while still retaining an income.

Description: The Discounted Gift bond enables an individual to take a fixed level of income until death while moving money out of his estate to reduce his potential inheritance tax bill.

Conditions: The minimum investment is £25,000, which can be invested in a range of 21 funds, from which investors can invest in a maximum of six. The six funds chosen can be changed free of charge at any time and the bond is available to investors aged between 18 and 89 - although it is aimed at wealthy individuals approaching retirement age.

Contact: www.lincolnuk.co.uk

Verdict: Discounted gift schemes essentially enable investors to have their cake and eat it. In other words, they can still receive an income from funds that they have locked away for their heirs to shelter them from IHT. The aim of the investment being used is therefore twofold: to provide a stable income flow for the person paying into the scheme, and to produce capital growth for the beneficiaries.

A bond should be a good way to achieve this, but 21 schemes do not really offer enough choice. Many of the rival schemes on the market offer investors the option of a far greater number of funds.

Rating: 2/5