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Who is subject to tax on an investment bond held in trust?
Gladys was a UK resident who took out an investment bond in the 1990s consisting of 40 identical policies. Three years later she set up a discretionary trust for her grandchildren and transferred this investment into the settlement. Gladys was one of the trustees but was not a beneficiary.
Fast forward 20 years and ten of the policies were cashed in and the proceeds were paid into the trust. A chargeable event certificate was issued showing a chargeable gain the nature of the event a surrender and the policyholders named on the certificate were the trustees of whom Gladys was one.
Gladys died in the next year and the remaining 30 policies were paid to the trust. Another chargeable event certificate has been issued the nature of the event being a death claim. The policyholders showing on the certificate are again the trustees but this...
