Tax and Trusts frequently asked questions

In general terms, for trusts other than absolute trusts, the settlor if he/she if alive and UK resident. If not, the trustees if at least one trustee is UK resident. If not the beneficiary. If it’s an absolute trust then HMRC’s view is that it is assessed on the beneficiary. For a parental settlement, all the previous rules are over-ridden and it would be the parent unless the beneficiary is either over 18 or married or in a Civil Partnership.

No the payment is classified as a return of capital.

No, it must be signed by the donor themselves. If the donor is unable to agree due to mental incapacity then Skandia is unable to accept a proposal for extra life cover.

When the client is mentally unfit or physically unable to apply themselves.

No, payment will only be made to an account in the client's name (for which the attorney may also be managing).

They must be certified by a solicitor or notary and not a financial adviser.

Yes, income tax is due but the client will receive a tax voucher in both instances which can then be used to assist in completing a tax return.

The trustees will be paid (into a designated trustee bank account) with no limit. On request from the trustees and proof of the beneficiary’s entitlement, Skandia would pay a beneficiary(ies) subject to an overall maximum of all such payments of £50,000 in any 12 month period. In the case of absolute trusts, however, where we have received proof of absolute entitlement, Skandia will pay full entitlement to the beneficiary.

(1) The settlor of the trust or (2) the trustees provided that the money comes from a trustee bank account or other existing investment held by the trustees.