Who pays the chargeable event tax?

[MargaretO]

My mother passed away in August 2015. She was the policy holder for a Prudential investment bond that she and my father set up 13 years ago to benefit my two daughters. On her death the bond was wound up and paid out to my two daughters equally. I have received a ‘chargeable event certificate’ relating to this and am not sure what to do with it.

Primarily I am not sure who the tax liability falls on. It appears, from the wording of the certificate that it would be the policy holder, my mother, but she is deceased. Do I need to fill out a tax return in my deceased mother’s name? Or does the tax liability fall onto the beneficiaries ie my daughters? Or am I liable as a trustee of this bond and in that case do I have to enter the information on the certificate on my own self-assessment form? But that seems wrong as I was neither policy holder nor beneficiary...

[maths]

I would suggest that the bond was held on bare trust in which case any liability is that of the beneficiaries of the bare trust.

The parent settlement provisions are not in point as the trust was not set up be the beneficiaries' parents.

If the bond was with a UK insurer the 20% tax credit should mean that probably there will be no net actual income tax charge on the beneficiaries.