On-Demand Events
Session 007 - wrapped or not, on or off and what about trusts?
20 Mar 25 1 min read
The changing tax landscape, in particular Autumn Statement 2022 and last Autumn's Budget, had put the use of bonds for financial planning firmly in the spotlight.
Barrie Dawson, Senior Technical Manager from M&G's technical team had run Bonds School from 11th February with Sessions 001 to 006 covering the key features and tax aspects of insurance bonds.
Now up to speed, had our knowledge refreshed or didn't need an update (delete as appropriate) it was time to pull it all together to take a look at the big questions to answer when looking to use bonds in financial planning.
Les Cameron (Head of Technical, M&G)
Barrie Dawson (Senior Technical Manager, M&G)
They looked at the initial decision to use a bond. Once made, the next big question - onshore or offshore, and finally what about trustees - when and why?
up to 90 minutes (including Q&A) I Structured CPD accredited by CII and CISI
Learning outcomes
By the end of this session, you will be able to:
- Describe when an insurance bond wrapper could improve client outcomes
- Evaluate the relative merits of onshore v offshore bonds
- Identify when different types of trust may find bonds the best option
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. Financial planners should always prioritise net of tax investment return objectives over a clients non-tax objectives?
A) True.
B) False.
2. Which of the following statements about offshore bonds is not accurate?
A) Dividends received while invested are exempt.
B) Capital gains while invested are exempt.
C) A non-UK tax resident offshore bond policyholder will be subject to UK chargeable event legislation.
D) Offshore bonds are recognised by HMRC as subject to taxation in accordance with the UK chargeable event regime.
3. Ben invests £50,000 in an GIA portfolio using accumulation shares. He invests a further £50,000 in the same portfolio but held through an onshore bond. In year one the portfolio generates £1,500 of dividends. Ben is a higher rate taxpayer and no dividend nil rate available. Which of the following statements is false?
A) Ben’s tax liability on the dividends will be £1,012.50.
B) Ben’s tax liability on the dividends will be £662.50.
C) Ben’s tax liability on the dividends will be £506.25.
D) Ben has no tax to pay as the income from his directly held portfolio as the income has been reinvested and no gains have been triggered on his bond.
4. Which of the following is never relevant for financial planners when advising trustees?
A) The tax position of beneficiaries.
B) The trustees attitude to risk.
C) The trust deed provisions.
D) Whether an investment generates natural income.
1. Financial planners should always prioritise net of tax investment return objectives over a clients non-tax objectives?
A) True.
B) False.
2. Which of the following statements about offshore bonds is not accurate?
A) Dividends received while invested are exempt.
B) Capital gains while invested are exempt.
C) A non-UK tax resident offshore bond policyholder will be subject to UK chargeable event legislation.
D) Offshore bonds are recognised by HMRC as subject to taxation in accordance with the UK chargeable event regime.
3. Ben invests £50,000 in an GIA portfolio using accumulation shares. He invests a further £50,000 in the same portfolio but held through an onshore bond. In year one the portfolio generates £1,500 of dividends. Ben is a higher rate taxpayer and no dividend nil rate available. Which of the following statements is false?
A) Ben’s tax liability on the dividends will be £1,012.50.
B) Ben’s tax liability on the dividends will be £662.50.
C) Ben’s tax liability on the dividends will be £506.25.
D) Ben has no tax to pay as the income from his directly held portfolio as the income has been reinvested and no gains have been triggered on his bond.
4. Which of the following is never relevant for financial planners when advising trustees?
A) The tax position of beneficiaries.
B) The trustees attitude to risk.
C) The trust deed provisions.
D) Whether an investment generates natural income.
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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