Who pays the tax on bond gains within a trust - decision tree
6 April 2020
Key points
- Bonds in trust don't follow the normal trust taxation rules
- The 45% trust rate only applies if the settlor is dead or non-UK resident
- The settlor can reclaim any tax they're liable for from the trustees
- Assigning the bond to a beneficiary can avoid tax at the trust or settlor’s rates of tax
- Gains on absolute trusts are generally looked through and taxed upon the beneficiary
Assumptions and limitations – The decision tree outcomes are based on a number of assumptions and are only illustrative. Abrdn does not accept any responsibility for any loss caused by reliance on this decision tree. This does not constitute financial or other professional advice from abrdn. If you require tax or other professional advice you should consult a suitability qualified professional.