Discounted Gift Trust
The discounted gift scheme is an arrangement which allows you to make a gift for inheritance tax (IHT) purposes while retaining the right to a fixed income (in the form of regular withdrawals) for your lifetime (or until the trust fund is exhausted). Usually an investment bond is used to hold the lump sum as its structure allows regular withdrawals to be made without immediate tax liability. A trust is then created which allows the remainder of the lump sum not required to provide your income to be gifted for your beneficiaries. Either a flexible or an absolute trust can be used.
Source: Threesixty LLP Online 2019