aviva investment bond deed of assignment

Drafting a Deed of Assignment

I have been instructed to prepare a Deed of Assignment in respect of two investment bonds put into effect in 2015. It is now clear they were incorrectly set up by the financial adviser, so that the Trustee has the benefit personally, rather than holding as Trustee. My question is, do I need to make any reference to this in the Deed?

Changes to investment bonds is typically undertaken with the provider. They usually have they’re own paperwork.

I’d contact the provider first, I’m assuming you wish to make changes to the beneficiaries.

Richard Bishop PFEP

Hi Richard.

Thanks for responding. In this case its the insurance company that referred the matter to us, I can only think its perhaps because it was their mistake initially and they are paying our costs that they have asked us to do it.

Gail Weston

Is this a bigger issue than just drafting a deed of assignment?

If the 2015 assignment effectively gave the bonds to the intended trustee personally, might not the assignment into trust be considered a settlement by them for IHT purposes, etc.?

If the 2015 assignment had the wrong effect I wonder if it should be remedied by an application to court for rectification. If the original transaction is not rectified, the mere completion of a new deed of assignment may fully utilise the “trustee’s” IHT nil rate band, significantly inhibiting their ability to conduct any IHT planning themselves. Should they die within 7 years of the new deed, their estate will be penalised if their nil rate band is no longer available as a result of what happens now.

I suggest it would be appropriate to contact HMRC before any documents are executed, to see if it will agree to look through the proposed deed to the original intention. This may seem over cautious, but I understand HMRC consistently asserts that it will not accept “rectification” of a mistake without a court order.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Thank you. It was for that reason I thought we must have to do something to show the trustee is not making a settlement personally, but I wondered if the error could somehow be referred to in a Deed of Assignment so that it was clear.

Another member pointed out that a trust doesn’t have to be in writing (other than land) and suggested the legal owner might execute a Declaration of Trust to confirm how she holds the bonds, but making it clear that the trust was established when the bonds were first assigned to her. Could that work? Thank you for responding. I do very little trust work, but I know enough to know when to be wary and I think I might now refer this on to someone else!

Gail Weston WMB Law Ltd

What trusts would she arguably hold the bonds upon? The relevant trusts would have to have been at least ascertainable at the time of acquisition of the bonds. The only one of the vital Three Certainties here seems to have been the subject-matter. It is a stretch to conclude that she originally acquired as trustee unless she did so knowingly as such and beyond a vague understanding (e.g. as a constructive trustee, when it would be a key part of the analysis to be able to identify the beneficiary also). If it appears so definitively that she took originally as beneficiary, however mistakenly, retrospection is not an option. In law the Trustee is just not a trustee at all it would seem.

The remedy the law provides is rectification which is discretionary, but awarded or denied according to established principle, and subject to evidence about the nature of the mistake alleged. As Paul says, HMRC’s practice is to insist on a court order— but rarely to intervene in the process and to abide by the outcome. This is reasonable because an order will bind all persons interested, including the bond provider, whereas if HMRC just took a unilateral view (second-guessing the court’s discretion) that in theory might be successfully challenged and it might not even bind the taxpayer.

A bond provider will be reluctant to pay out anyone other than the apparent legal owner or their assignee, to obtain a good discharge. Asserting that the bonds are really held on some trust is likely to spook them. Here the matter is referred by them and, without prejudice as to culpability, indicates some kind of notice of a possible trust with at least a resultant strong doubt on their part about whom to pay. An assignment apparently fixes that but is not retrospective. It still involves their taking a view that the “Trustee” has the right to act as assignor but the assignee may be the only person or persons who might otherwise contest her personal entitlement.

It is not clear whether there is recourse against the financial adviser or bond provider (or admission of liability or creditworthiness) or precisely whose mistake is alleged to be operative and why, or the value at stake. Indeed it is not clear who is your client and what are your instructions. The bond provider may be paying and be the client for the mechanical drafting but it seems the “Trustee” is the likely client for the advice as the intending assignor. Is there a conflict?

Jack Harper

Thank you for your response. Sorry, I probably should have given more detail. The Trustee is my client. She was referred to me by a Wealth Management Company, who are paying her costs. She holds on the trusts of her late sisters Will for minor beneficiaries and took advice from them the company on where to invest. The trust funds were subsequently invested in two Bonds with that Company, but the clients new adviser has now spotted that apparently the Bonds were set up as though she herself was the owner and beneficiary, instead of holding as Trustee.

In those circumstances there must be a strong inference that she is a constructive trustee of the bonds. She has used trust funds to subscribe for the bonds. Equity would not permit her to hold them otherwise than on the existing Will trusts. If she is the sole trustee an assignment is somewhat over the top. Although you can assign to yourself in a different capacity here she would be a trustee on both sides, constructive as assignor and appointed as assignee. I suggest all she needs is to receive positive legal advice that she needs to do nothing and why. Even appointing a co-trustee just for a meaningful assignment seems excessive if the Will trust is not one of land and if is not considered desirable otherwise e.g. to secure trusteeship succession.

In agreement with Jack, as the individual knows the terms on which they are supposed to be holding the bonds (here, the trusts which are set out in the Will), the individual can execute a Declaration of Trust stating that. Similarly, I would recommend a second trustee - indeed, the terms of some Will trusts require there to be two trustees for the exercise of certain powers. If a second trustee is going to be added, the Deed of Assignment (from “Trustee A” to “Trustee A and Trustee B” could set out initially that Trustee A holds the bonds on the trusts of the Will, before the assignment to A&B “… to hold on the terms of those trusts…” (or similar). It is worth being absolutely sure that, at the time of the original investment, there was no intention that the bonds (or the funds used to invest in them) should belong beneficially to A. Gail says that this was not the intention, but any evidence of that (eg correspondence, attendance notes, etc) would be useful to keep should the position be queried in the future.

Paul Davidoff New Quadrant

I would only add to Paul’s sound comments and action plan that if she used trust funds to subscribe she would hold the bonds as a constructive trustee even if she had had the actual intention of benefiting personally

Thank you both. That way makes sense to me. There was never any intention of benefitting personally. Until learning otherwise, she believed the trust funds were rightly invested for her nieces. As you suggest I will see what paperwork exists from the end of the administration period and proceed as you suggest.

Many thanks. Gail Weston

Assignment of an Investment Bond

Life insurance investment bonds are single-premium policies that provide tax efficiencies and comprise varied investments. Capital redemption bonds have fixed terms, allowing investors to select assets with strong growth potential and offering tax-efficient withdrawals.

An assignment refers to the process whereby you transfer the ownership of an investment bond or capital redemption bond, or segments of either product. As this constitutes a legal transfer of ownership to another person, an assignment is completed with a formal legal document called a deed of assignment.

You may assign an investment bond or segment of a policy as a gift, to provide financial support for a family member or adult child, or as part of your estate planning. Understanding the tax implications is important for all parties.

Table of Contents

What Is an Assignment of an Investment Bond?

Assigning an investment bond transfers ownership to your selected recipient. The nature of assignment means the recipient owns the bond or policy segment and is treated as the original beneficial owner, in the same way as if they had held the bond from the initial investment date.

The rules around assignments offer tax planning opportunities, and you can complete varied types of assignments, including:

• Gifted assignments: When you assign a bond to a loved one or family member, you transfer ownership to your beneficiary. Note that assignments as part of a separation or divorce settlement are not often treated as gifts by HMRC.
• Mortgage assignments: An assignment by way of mortgage means that the security underlying the bond is transferred to a third party. The recipient receives the right to accept payment for debt assets.
• Assignments into a trust: Completing an assignment into or out of a trust means the ownership and rights to the investment bond transition into or from the trust.

In any scenario, an assignment is a legally binding transaction that should be completed with a comprehensive understanding of the outcomes, potential taxation liabilities arising, and effects on your inheritance planning.

The Benefits of Assigning an Investment Bond

Much depends on the reason for the assignment, but there may be advantages, not least if you transfer ownership to a taxpayer in a lower tax bracket.

Owners can assign a bond to an adult child without capital gains tax liability. Many other gifted investments would trigger a capital gains tax obligation in the same way as investment disposal would.

There is no immediate income tax obligation because an assignment is not considered a chargeable event and therefore is not subject to income tax. However, this relies on completing the assignment without payment or any other form of money changing hands. Gifted assignments are treated as ‘not for money’ ownership assignments.

When assigning a bond to a trust, usually as an inheritance tax planning exercise, there is equally no capital gains or income tax charge arising, which also applies where the assignment transfers ownership to an individual.

Provided the assignment is a gift, an assignment is highly efficient from a tax perspective. If you choose to assign a bond or segments of a bond to another taxpayer subject to a lower tax bracket, you can effectively reduce the income tax payable on encashment.

Finally, when considering inheritance tax planning , if the assignment is a gift, and you live for at least seven years following the assignment, then the entire bond value will normally not be included within your estate for calculation purposes, whereas other gifts, and those occurring within seven years of the transfer, may be subject to inheritance tax.

Tax Planning Opportunities Linked With Investment Bond Assignments

You might consider assigning a bond for many reasons, one of which relates to the costs of educational and university expenses. Policyholders can assign investment bonds to an adult child and, if the recipient has an unused personal allowance, mitigate exposure to taxation.

Another opportunity exists where the gain, or gain after top-slicing, would fall within the basic tax rate, and the recipient falls within this income category. Owners can assign policies to any family member with a lower income tax rate, controlling the tax liability against a gain or capital drawdown.

As with any financial transaction, there are pitfalls to be conscious of because once a bond has been assigned, it is legally owned and controlled by the recipient. If the new owner of the bond passes away, there is the potential for the full value to be included in inheritance tax calculations if the assignment has not been made through a trust. An additional risk could be when the new owner separates or divorces a spouse, in which case the full bond value may be included in settlement negotiations.

These scenarios may not affect your decision-making, but remaining aware of possible disadvantages or outcomes remains important to make informed decisions.

Professional Advice on the Assignment of an Investment Bond

Chase Buchanan works with expatriates and investors worldwide and always recommends you consult an experienced, knowledgeable adviser to evaluate the potential outcomes, risks, and rewards of any long-term financial planning decisions.

Insurance investment bonds are highly flexible, provide tax efficiencies, and can be assigned at any time to conform to your tax planning requirements, financial objectives or familial needs. Assets underlying a bond appreciate and grow without income or capital gains tax deductions and qualify for top-slicing and apportionment relief.

A further positive element is that investment bonds are not currently incorporated into means testing, which can be a factor when budgeting for later life care and estate planning. A deed of assignment is a relatively simple way of gifting or transferring ownership to the recipient of your choice.

There are varied benefits available when assigning a bond to a trust. Still, the priority is to appraise the suitability of the transaction beforehand to ensure it meets your requirements and expectations.

Please get in touch with your nearest Chase Buchanan office for more wealth management information, to arrange a convenient time to discuss your plans to initiate an investment bond assignment, or to assess the options available.

*Information correct as at March 2023

• In The Press
• Company News
• Global Outlook
• Income Streams
• Money Management
• Offshore Investments
• The Economy
• Wealth Building

Recent Posts

• Seeking Reliable Investment Management Support as a Global Expatriate
• Calculating the Cost of Living in Malta: Considerations for Expats Planning a Relocation
• How an Expat Pension Transfer Specialist Can Help You Avoid Unnecessary Tax Liabilities
• Essential Factors to Consider When Planning to Retire in Malta
• Dispelling the Myths Around International Financial Advice

Previous Post Living in Malta, Tax Advice For Expats

Next post what is a qrops where international pension transfers are available.

Comments are closed.

• Chase Buchanan Insurance Agents & Advisors
• Free Guides
• Brand Ambassadors
• Regulations
• Terms of use
• Data Protection and Privacy
• Risk Disclosure and Warnings Notice
• Company Documentation
• Client Login

Our Offices

• Belgium Office
• Canada Office
• Canary Islands Office
• Cyprus Office
• Malta Office
• Portugal Office
• Spain Office
• UK Administration Centre

© 2024 Chase Buchanan. Wealth and Investment Management. Chase Buchanan Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission with CIF Licence 287/15. Chase Buchanan Ltd offer services in the EU on a cross border basis as per the provisions of MiFID. Managed by Woya Digital

• Meet the Team
• Corporate Brochure
• Investments
• Financial Planning
• UK Lifetime Allowance
• Standard Fund Threshold
• SIPPS v QROPS
• UK Pensions Transfers
• US Connected Persons
• Education Fees Planning
• Life and Critical Illness Insurance
• Corporate Services
• Expat Tax Guide – Belgium
• Expat Tax Guide – Cyprus
• Expat Tax Guide – Italy
• Expat Tax Guide – France
• Expat Tax Guide – Malta
• Expat Tax Guide – Portugal
• Expat Tax Guide – Spain
• Residency Guide – Cyprus
• Residency Guide – France
• Residency Guide – Portugal
• Residency Guide – Spain
• Guide to Retiring in the EU
• International Pension Transfers
• Irish Pension Transfers
• Education Fee Planning
• Health, Income & Life Protection
• Investment Scams Guide
• Moving Abroad Checklist
• Offshore Investment
• Retirement Planning
• SIPPs v QROPs
• UK Lifetime Allowance Guide
• Canary Islands
• United Kingdom

All rights reserved Chase Buchanan.

Narrative assignment

Past papers of intermediate part 2 gujranwala board 2011

Aviva investment bond deed of assignment

Aviva investment bond deed of assignment.

CGT A gain made under a UK bond is not subject to CGT unless it has at any earlier time been acquired by any person for actual consideration. What are the Benefits of Assigning? Any gain is exempt from CGT gains unless the policy was acquired for actual consideration. Receipt of the sum assured or surrender proceeds would both count as disposal proceeds. If the trustees cannot be charged because they are not resident in the UK then the anti avoidance provisions of S ICTA are applied with certain modifications.

In your hand they are free of capital gains tax. The capital gain would be calculated by deducting purchase price from disposal proceeds. If you’re a customer please go to our customer site. This is possible because an investment bond is typically divided up equally between a number of identical, but distinct and self-contained policies.

The individual or trustee who is liable for tax under the chargeable event regime is treated as having paid tax at the basic rate on the amount of the gain. The gain is chargeable as follows: The taxation of bare discounted gift trusts is covered here Other than discounted gift trusts, regardless of age, chargeable event gains will be taxed on the beneficiary of a bare trust subject to one exception.

It is possible to gift an investment bond to an adult child without causing a capital gains tax charge. The change of ownership should be supported by a proper legal document — a deed of assignment.

The interaction between income tax and cgt was considered in the case of Drummond v HMRC where a small chargeable event gain arose on the surrender of a second hand life policy.

Note that under the Scottish rate of income tax SRIT measures, the Scottish Parliament can only set the rates and limits for non-savings and non-dividend income. Repayments are treated as additional premiums. Trustees UK resident trustees are liable if immediately before the chargeable event they are UK resident and the person who created the trust is non-UK resident or dead. Note that new legislation has been introduced SA ITTOIA allowing a person who has made a part surrender or part assignment giving rise to a gain under S to apply to HMRC to have the gain reviewed if they consider it is wholly disproportionate.

Where the bond is owned jointly, the gain will be split in the same proportion as ownership. Example Jo takes out an investment bond where she is the sole life assured. There may be a liability if you withdraw more and you are a higher rate tax payer top sliciing relief. She assigns it into a discretionary trust. This Deed is not designed for use by anyone who wishes to sell a policy to a buyer or mortgage it to a lender.

For advisers only, not for use with customers. There is no relief under the chargeable event regime in any circumstances for an investment loss sustained on a bond. The lives assured are him and his son.

However, ‘deficiency relief’ under S ITTOIA may be available to individuals only , when a policy comes to an end. The notional tax is not repayable in any circumstances. In addition, premiums paid by the new owner would be deductible as would any incidental costs of acquisition or disposal. Transfer to a Trust: Any gift you make is taken into account for Inheritance Tax purposes. John is chargeable on the gain. You should bear in mind that this is a standard Deed and may not always be applicable to your particular circumstances.

Our view Insurance investment bonds represent one of the most flexible investment products available in the market and have been so since when the relvant tax law came into force.

The individual may ask HMRC to certify the amount recoverable S ITTOAI

Share this:

Published by garrettbarnhart64

View all posts by garrettbarnhart64

Leave a comment Cancel reply

• Already have a WordPress.com account? Log in now.
• Subscribe Subscribed
• Copy shortlink
• Report this content
• View post in Reader
• Manage subscriptions
• Collapse this bar

Virtual Tour

Experience University of Idaho with a virtual tour. Explore now

• Discover a Career
• Find a Major
• Experience U of I Life

More Resources

• Admitted Students
• International Students

Take Action

• Find Financial Aid
• View Deadlines
• Find Your Rep

Helping to ensure U of I is a safe and engaging place for students to learn and be successful. Read about Title IX.

Get Involved

• Clubs & Volunteer Opportunities
• Recreation and Wellbeing
• Student Government
• Student Sustainability Cooperative
• Academic Assistance
• Safety & Security
• Career Services
• Health & Wellness Services
• Register for Classes
• Dates & Deadlines
• Financial Aid
• Sustainable Solutions
• U of I Library

• Upcoming Events

Review the events calendar.

Stay Connected

• Vandal Family Newsletter
• Here We Have Idaho Magazine
• Living on Campus
• Campus Safety
• About Moscow

The largest Vandal Family reunion of the year. Check dates.

Benefits and Services

• Vandal Voyagers Program
• Vandal License Plate
• Submit Class Notes
• Make a Gift
• View Events
• Alumni Chapters
• University Magazine
• Alumni Newsletter

SlateConnect

U of I's web-based retention and advising tool provides an efficient way to guide and support students on their road to graduation. Login to SlateConnect.

Common Tools

• Administrative Procedures Manual (APM)
• Class Schedule
• OIT Tech Support
• Academic Dates & Deadlines
• U of I Retirees Association
• Faculty Senate
• Staff Council

University of Idaho News

University Communications and Marketing

Fax: 208-885-5841

Email: [email protected]

Web: Communications and Marketing

Aviva Abramovsky Named Dean of U of I College of Law

May 03, 2024.

MOSCOW, Idaho — Aviva Abramovsky has been named the new dean of the University of Idaho College of Law. She will take over the role full time on June 10.

“I am excited to join University of Idaho as dean of the College of Law and become a part of this inspiring and welcoming academic community — one well known for its commitment to the highest quality of legal education,” Abramovsky said. “For both the law school and university, this is an unprecedented time of opportunity. I look forward to building on this community’s commitment to excellence by consistently engaging with the broader law school community to help our faculty, staff, students and alumni achieve their professional and educational goals. I am truly honored by this opportunity and commit myself to achieving the aspirations of this unique institution to the very best of my abilities.” 

Abramovsky is a noted expert in the fields of insurance law, commercial law, regulation of financial entities and legal ethics. She is a member of the American Law Institute and was the winner of the New York State Bar Association Professor David D. Siegel Award in recognition of outstanding contributions to the study of New York law. She is the author of “Uniform Commercial Code, West’s McKinney’s Forms for New York,” as well as numerous other book chapters and articles in the fields of insurance and commercial law.

She joins Idaho Law from the University of Buffalo School of Law, where she was the William J. Magavern Faculty Scholar. Before that role, she served as dean of the school from 2017-23. She also spent 13 years teaching at the Syracuse University College of Law.

During her time at Buffalo, Abramovsky oversaw the expansion of the school’s experiential and clinical legal education program and the expansion of student support systems. It was under her leadership that Buffalo launched the second undergraduate law program in the country, as well as a Doctor of Juridical Science degree.

A graduate of Cornell University, she received her bachelor’s degree in industrial and labor relations before earning her juris doctor from University of Pennsylvania.

Abramovsky will take over for Johanna Kalb, who has served as dean since 2021. Kalb helped lead Idaho Law during its continued expansion in Boise and helped the college grow to record enrollment.

Media Contacts

Joe St. Pierre Marketing and Communications Manager College of Law 208-885-7115 [email protected]

About the University of Idaho

The University of Idaho, home of the Vandals, is Idaho’s land-grant, national research university. From its residential campus in Moscow, U of I serves the state of Idaho through educational centers in Boise, Coeur d’Alene and Idaho Falls, nine research and Extension centers, plus Extension offices in 42 counties. Home to nearly 11,000 students statewide, U of I is a leader in student-centered learning and excels at interdisciplinary research, service to businesses and communities, and in advancing diversity, citizenship and global outreach. U of I competes in the Big Sky and Western Athletic conferences. Learn more at uidaho.edu .

Advertisement

Moscow Opens Bond Trades to Foreigners From ‘Not Hostile’ Countries

The move by Russia to loosen financial controls imposed after its invasion of Ukraine won’t affect investors in the United States or European Union.

• Share full article

By Eshe Nelson

• Aug. 15, 2022

Russia has taken another step to ease restrictions that it adopted to protect its economy and financial markets from sanctions and other consequences of its invasion of Ukraine. Beginning Monday, investors from “countries that are not hostile” will be allowed to trade in Russia’s bond market, the Moscow Exchange said.

After the invasion began in late February, the value of Russian financial assets plummeted and then trading was halted on the Moscow Exchange. About a month later, limited trading in domestic bonds returned for investors in Russia, and slowly more trading was permitted. But now, amid a complex web of rules, trading in the bond market, which includes government and corporate debt, has been opened up to some foreigners.

Access to the Moscow Exchange for bond trading will be limited to nations that Russia considers friendly. Investors from “unfriendly nations” — a group that includes the United States, European Union, Japan, Australia and Canada, which are severing financial ties with Russia and have imposed sanctions since the invasion — still won’t be able to access trading in Moscow. Trading in Russian assets has been greatly restricted for these investors by their home nations, too.

Efforts to cut Russia off from the global financial system pushed the country into default on foreign-currency government bonds in June because the payments couldn’t reach investors.

Late last month, the U.S. Treasury authorized financial transactions that allow investors to wind down their holdings in Russian assets and auctions on a type of derivative that pays out in the event of a default. Some Wall Street banks are facilitating this trading in Russian debt, Reuters reported on Monday , having avoided the market because of the risks from sanctions.

Eshe Nelson is a reporter in London, where she writes about companies, the British economy and finance. More about Eshe Nelson

• All Articles
• Books & Reviews
• Anthologies
• Audio Content
• Author Directory
• This Day in History
• War in Ukraine
• Israeli-Palestinian Conflict
• Artificial Intelligence
• Climate Change
• Biden Administration
• Geopolitics
• Benjamin Netanyahu
• Vladimir Putin
• Volodymyr Zelensky
• Nationalism
• Authoritarianism
• Propaganda & Disinformation
• West Africa
• North Korea
• Middle East
• United States
• View All Regions

Article Types

• Capsule Reviews
• Review Essays
• Ask the Experts
• Reading Lists
• Newsletters
• Customer Service
• Frequently Asked Questions
• Subscriber Resources
• Group Subscriptions
• Gift a Subscription

The September/October issue is now available online

Browse book reviews by:

• Magazine Issue

Assignment Moscow: Reporting on Russia From Lenin to Putin

Reviewed by maria lipman, by james rodgers.

Rodgers, a British journalist who has worked in Russia at various times since the 1990s, writes about the plight of the English-speaking correspondents who have covered Russia, going all the way back to the Russian Revolution in 1917. That their task was not easy is hardly surprising, yet Rodgers repeatedly emphasizes the difficulties they faced (the word “difficult” is used to describe their job at least two dozen times): strict censorship (foreign journalists were forced to clear their dispatches with Soviet authorities until 1961), travel restrictions, limited access to senior officials and ordinary people alike, and the government’s suspicion that Anglo-American correspondents were spies in disguise. Even Rodgers’s discussion of the American journalist Hedrick Smith—who, despite the restrictions, famously managed to produce exceptionally rich and insightful coverage of the Soviet Union and its people in the 1970s—is reduced to Smith’s reflections on how difficult his work was. Rodgers’s narrative rests on an enormous number of articles in Anglo-American media, books by and about journalists, and his own interviews with many Moscow correspondents. He quotes some of them as saying that journalists knew and understood Russia better than diplomats or policymakers did. This may or may not be true. Unfortunately, Rodgers doesn’t give the diplomats and policymakers a chance to respond.

• More By Maria Lipman

More from Eastern Europe and Former Soviet Republics

Nested Nationalism: Making and Unmaking Nations in the Soviet Caucasus

By krista a. goff, a short history of russia: from the pagans to putin, by mark galeotti, weak strongman: the limits of power in putin’s russia, by timothy frye.