On-Demand Events
Session 001: What's a bond (onshore/offshore)?
14 Feb 25 5 min read
Since the 2022 Autumn Statement there’s been an increased demand for information about onshore and offshore bonds. In response to this, we’ve designed six bite-sized sessions covering the basics of bonds and some of the more technical aspects like taxation.
This is the first session of the six-part series.
Les Cameron (Head of Technical, M&G Wealth)
Barrie Dawson (Technical Manager, M&G Wealth)
In this session, we look at applicants and lives assured, using a life assured bond vs capital redemption option, and the segmentation of bond policies.
60 minute video (approximately) I Structured CPD accredited by CII and CISI
Learning outcomes
By the end of this session, you will be able to:
- Understand the difference in the legal and beneficial ownership position of owners, lives assured and estate/trust beneficiaries.
- Evaluate and determine whether to use a life assured or capital redemption basis.
- Identify who should be the bond owner(s), lives assured and how many segments the bond should be set up with.
Claiming your CPD
To claim your CPD certificate, test your knowledge with the questions below.
Write down your answers to each of the following questions and check your answers when you click to claim your CPD certificate on the link below
1. Ben was the sole applicant for a bond set up in 2005. Ben and ex-wife Sarah are lives assured on a joint-life 2nd death basis. If Ben dies before his ex-wife, which of the following statements is true?
A) The bond automatically ends on Ben’s death as he’s the sole owner.
B) Sarah will become the sole owner due to joint tenancy survivorship rules.
C) Beneficial ownership will be dictated by the terms of John’s Will.
D) If the bond is assigned, the new owner will need to be added as a life assured.
2. Legal ownership of a bond cannot be transferred to someone not named as life assured. Is this statement true or false?
A) True
B) False
3. John wants to gift £40,000 into a discretionary trust for his two grandchildren using an offshore bond. The intention is to assign segments to each grandchild when they’re at university and non-taxpayers. John is a higher rate taxpayer and not in good health. Which of the following statements is appropriate to meet his objectives?
A) John should be the sole life assured.
B) Each grandchildren must be a life assured to allow segments to be assigned to them.
C) Naming the grandchildren as lives assured will guarantee there’s no chargeable event prior to John’s death.
D) Capital redemption basis will guarantee John’s death doesn’t trigger a chargeable event.
4. Regarding bond segments, which of the following statements is incorrect?
A) If the intention is to assign segments equally between estate or trust beneficiaries, the bond should be set up with a number of segments divisible by the number of beneficiaries.
B) The number of segments is never relevant if the owner is the sole life assured.
C) Segments can be surrendered or assigned independently.
D) A higher number of segments could help with tax planning opportunities.
1. Ben was the sole applicant for a bond set up in 2005. Ben and ex-wife Sarah are lives assured on a joint-life 2nd death basis. If Ben dies before his ex-wife, which of the following statements is true?
A) The bond automatically ends on Ben’s death as he’s the sole owner.
B) Sarah will become the sole owner due to joint tenancy survivorship rules.
C) Beneficial ownership will be dictated by the terms of John’s Will.
D) If the bond is assigned, the new owner will need to be added as a life assured.
2. Legal ownership of a bond cannot be transferred to someone not named as life assured. Is this statement true or false?
A) True
B) False
3. John wants to gift £40,000 into a discretionary trust for his two grandchildren using an offshore bond. The intention is to assign segments to each grandchild when they’re at university and non-taxpayers. John is a higher rate taxpayer and not in good health. Which of the following statements is appropriate to meet his objectives?
A) John should be the sole life assured.
B) Each grandchildren must be a life assured to allow segments to be assigned to them.
C) Naming the grandchildren as lives assured will guarantee there’s no chargeable event prior to John’s death.
D) Capital redemption basis will guarantee John’s death doesn’t trigger a chargeable event.
4. Regarding bond segments, which of the following statements is incorrect?
A) If the intention is to assign segments equally between estate or trust beneficiaries, the bond should be set up with a number of segments divisible by the number of beneficiaries.
B) The number of segments is never relevant if the owner is the sole life assured.
C) Segments can be surrendered or assigned independently.
D) A higher number of segments could help with tax planning opportunities.
Before collecting your certificate, please take a moment to provide us feedback on this session, please email prudential.distribution.team@prudential.co.uk
Complete the form below and we’ll email your CPD confirmation to you. Please use the email address that you would usually use when contacting us.
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