25.2.1 Tax considerations

HM Revenue and Customs adopt the practice of taxing chargeable event gains on bonds held subject to a bare trust on the beneficiary entitled to the trust assets. Where the bond is with a UK insurance company, this means that a charge to income tax will only arise if, having taken account of any top-slicing relief, the beneficiary is a higher rate taxpayer. The gain will be taxed as savings income and any tax charge will then be at a rate of 20% (or 25% if the beneficiary happens to be an additional rate taxpayer).

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