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.

Single premium bonds as trustee investments

Advantages

Disadvantages

Simple administration

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