24.7 Collective investments or single premium bonds?
We now consider the pros and cons of using single premium bonds or collective investments as trustee investments focusing on the more important tax points.
Single premium bonds, as non-income producing assets, are in general not appropriate for trustees of life interest trusts where there is a desire (or an obligation) to pay an income to a beneficiary. However, this does not mean that a bond will never be an acceptable investment for such a trust. It all depends on the facts and whether the trustees have power to advance capital. Again, advice is essential.