Leaving an investment bond to a Charity under a will

(kim jarvis) #1

UK bond sole owner has died but there is no chargeable event as the bond covers multiple lives assured. Will states that bond number XYZ is for charity ABC absolutely. The executors will assign the bond to the charity.

Does anyone know how the charity will be taxed when they surrender the bond? and if they can reclaim the 20% tax credit?

kim jarvis
canada life limited

(malcfinney1) #2

On surrender any gain will be subject to income tax at the basic rate.

A tax credit is available re UK policy (but not if an offshore policy) thus producing no net tax charge.

The tax credit is not repayable.

Malcolm Finney

(malcfinney1) #3

See ITTOIA 2005 ss.467 & 530.

Malcolm Finney

(don) #4

Do you think that the intention of the testator was to leave the value of the Bond to charity, rather than the Bond itself? In my ignorance I beleived that when the sole owner dies, the Bond ends and the proceeds are paid out.

Don Reevely
Will You Ltd