I am struggling to find the answer to this unusual situation and wonder if anyone can point me in the right direction. I think I know the answer but there does not appear to be any definitive guidance and the legislation is certainly not clear.
The situation is as follows:
- D settled her offshore investment bond into a “probate trust” (bare trust for herself) in 2004 (the intention being solely to avoid the need for probate in that jurisdiction).
- Lives assured were not D and are still alive
- The policy holders are the Trustees
- D and Trustees are UK resident
- D’s estate’s sole residuary beneficiary is a charity.
- D died in 2023.
Trustees have been asked to encash the bond by the Executors and it is assumed that the Chargeable Event Certificate will be issued to the Trustees as the policy holders.
The question is, who is liable to pay the tax on the chargeable event gain and who should be reporting it? The Trustees (and if so at what rate?) or the Executors?
I would be grateful for your views and if someone could point me in the direction of the right authority.