On-Demand Events
Session 004: Who's liable - Individuals, Estates & Trusts
4 Mar 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 forth session of the six-part series.
Barrie Dawson (Senior Technical Manager, M&G)
Graeme Robb (Senior Technical Manager, M&G)
In this session we look at how to determine who’s liable – is it individuals, personal representatives, estate beneficiary, trust settlor, trustee, or trust beneficiary? We’ll also be discussing the use of assignments to transfer the liability to another person.
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:
- Evaluate who's liable for bond gains
- Identify when to use assignments to transfer the liability to increase tax efficiency
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. Clare and Phil gifted a jointly owned bond into a discretionary gift trust many years ago. Phil died five years ago and Clare died in February 2025. The trustees want to distribute the trust fund when the youngest beneficiary (Joe) turns 18 in May 2025. If the trustees surrender the bond in May 2025, who will be liable for the gain?
A) The full gain will be assessed against Joe.
B) The full gain will be assessed at the trust rate of 45%.
C) The full gain will be assessed against Clare.
D) 50% of the gain will assessed against Clare and 50% assessed at the trust rate of 45%.
2. Mina died this tax year but her bond continued with her son as the sole life assured. Which of the following statements is false if her personal representatives (PRs) surrender the bond?
A) The gain will be assessed at the PR rate of 20%.
B) The beneficiaries of the proceeds will be taxed as receiving estate income.
C) The beneficiaries cannot benefit from top-slicing relief.
D) Mina will be assessed on the gain if PRs surrender in the tax year of her death.
3. Juan set up a bond in a Bare Gift Trust for his son Jose 10 years ago. He wants to use the funds to purchase a car for Jose’s 17th birthday. The trustees surrender the bond and receive a chargeable event certificate with a gain of £10,000. Who’s liable for the gain?
A) The full gain will be assessed at the trust rate of 45%.
B) The full gain will be assessed against Jose bare trusts are transparent for tax purposes.
C) 50% of the gain will be assessed against Juan and 50% against Jose.
D) The full gain will be assessed against Juan.
4. Suraj and Lalita were joint owners and joint lives assured on a bond. Lalita died five years ago. Suraj dies this tax year which triggers a chargeable event. Which of the following statements is true?
A) 50% of the gain was assessed against Lalita when she died.
B) 100% of the gain will be assessed against Suraj.
C) 50% of the gain is assessed against Suraj and 50% at personal representative rate.
D) 100% of the gain is assessed at the personal representative rate.
1. Clare and Phil gifted a jointly owned bond into a discretionary gift trust many years ago. Phil died five years ago and Clare died in February 2025. The trustees want to distribute the trust fund when the youngest beneficiary (Joe) turns 18 in May 2025. If the trustees surrender the bond in May 2025, who will be liable for the gain?
A) The full gain will be assessed against Joe.
B) The full gain will be assessed at the trust rate of 45%.
C) The full gain will be assessed against Clare.
D) 50% of the gain will assessed against Clare and 50% assessed at the trust rate of 45%.
2. Mina died this tax year but her bond continued with her son as the sole life assured. Which of the following statements is false if her personal representatives (PRs) surrender the bond?
A) The gain will be assessed at the PR rate of 20%.
B) The beneficiaries of the proceeds will be taxed as receiving estate income.
C) The beneficiaries cannot benefit from top-slicing relief.
D) Mina will be assessed on the gain if PRs surrender in the tax year of her death.
3. Juan set up a bond in a Bare Gift Trust for his son Jose 10 years ago. He wants to use the funds to purchase a car for Jose’s 17th birthday. The trustees surrender the bond and receive a chargeable event certificate with a gain of £10,000. Who’s liable for the gain?
A) The full gain will be assessed at the trust rate of 45%.
B) The full gain will be assessed against Jose bare trusts are transparent for tax purposes.
C) 50% of the gain will be assessed against Juan and 50% against Jose.
D) The full gain will be assessed against Juan.
4. Suraj and Lalita were joint owners and joint lives assured on a bond. Lalita died five years ago. Suraj dies this tax year which triggers a chargeable event. Which of the following statements is true?
A) 50% of the gain was assessed against Lalita when she died.
B) 100% of the gain will be assessed against Suraj.
C) 50% of the gain is assessed against Suraj and 50% at personal representative rate.
D) 100% of the gain is assessed at the personal representative rate.
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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