Assignment of policies to lives assured

[marc02]

When setting up an offshore investment bond in trust, is it ok to have the beneficiaries named in the trust as Lives Assured on the the product. In particular where those lives assured / beneficiaries may be assigned policies (clusters)? I presume there is no issue, but just checking?

[AnthonyR]

I assume the people who are life assured beneficiaries aren't also the settlors? On the basis that this isn't the case, I don't see any issues with the trustees having a life policy on one of the beneficiaries as long as the beneficiary of that policy is also a beneficiary of the trust (and not a settlor).

[marc02]

Thank you for your response. I was contemplating the situation where a beneficiary is assigned a policy where ultimately they themselves are the life assured, but I suppose that should make no real difference and they would still be able to cash-in part or all of the policy or even assigned their own beneficiaries.

[maths]

In a typical single premium investment an individual X would make an investment into a SPB (possibly one policy or more likely a single policy made up of segments) with more than one life assured eg lives assured A, B, C and D.

X could then settle the policy on trust (eg discretionary trust) for a class of beneficiaries including A, B, C and D).

On a chargeable event arising any income tax charge would be that of X as the "creator" of the trust (assuming at that time X is alive). Otherwise, the trustees are subject to the charge.

During the life of the policy the trustees may assign the policy (or segments) to one or more beneficiaries.