The term ‘settlements’ means all trusts that are not bare trusts. These will include discretionary trusts, power of appointment interest in possession (flexible) trusts and accumulation and maintenance trusts.
These trusts may have been created either during lifetime (inter-vivos) or via a testamentary disposition (under a will, an intestacy or even via a deed of variation).
Where CEGs arise to these trusts, the person who will be taxed on those CEGs will depend on whether:
•the settlor is alive or dead in the tax year in which the bond is encashed;
•the settlor is UK resident or not in the tax year in which the bond is encashed; and