Tax Payable on Chargeable Event (Investment Bonds)

[SG2000]

Good morning. My query concerns the amount of tax needed to be paid on chargeable events arising from the cashing in of two investment bonds following the decease of the settlor (my brother-in-law) in October 2019.

The Chargeable Event Certificates state the total gain arising to be £23,532, and that £4,707 is the amount of basic rate income tax "treated as paid". Am I right in assuming that a further 25% tax - £5883 - will need to be paid on the gain i.e. the balance of the 45% trustee rate?

[maths]

The settlor is taxable if he was the settlor and was resident in the UK in the tax year in which the gain arose.

The trustees (at 45%) are liable if immediately before the gain arose they were UK resident and the settlor was dead.

[SG2000]

Thank you for your response.

The bonds were frozen a week or two after the settlors decease. St James Place issued the Chargeable Event Certificates after they had been cashed in.

Therefore am I right in assuming the gain will be considered to have arisen during the lifetime of the settlor? He was paid a monthly sum from the trust that amounted to over £30,000 over the 10 years the trust was in place.

[maths]

If brother-in-law was UK resident in the tax year of his death and was the settlor of the (UK) trust the gain is treated as his, not the trustees.

[SG2000]

Thanks again. I think this clears it up.