Income Bonds Into Trust

[Peter D]

Initially a mojor company where prepared to place a lump of Income bonds into trust leaving the income going to the Settlor and the value of the bonds held in a Flexible Trust placeing them outsaide the IHT calcualtion of the settlors estate. The Settlor was not a beneficiary. They now declare this can not be done as there will be tax inplications and the bonds will not be outwith any estate IHT. The Bonds has a more than 1% like assurance on them and I assumed they would consider a Loan Trust with the beneficeries being the Settlor and one other beneficiary. Can any one though any light on this or other type of suitable trust the bond value is 30K. Regards Peter

[Arnold Aaron]

Sounds like an investment bond here, possibly under a discounted gift scheme, though it does not seem clear from your discription. Income Bonds cannot be placed in Discounted Gift trust.

[Peter D]

The Bonds already exist and are Income Bonds with Life Assurance. They were in joint names then when her husband passed away they transfered into her name and now she wants to place these in Trust for her Daughter but still receive the monthly income from them. The Company provided Flexible Trust Documents for her to have completed by her solicitor/ IHT practioner but reports litlle has happened and when I made enquiries with the company ( Large One ) they question the validity of the original letter from them and the suitabilty of the Trust they offered. I'm caught between a rock and a hard place at the moment so all lines of thought are useful. Regards Peter