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Guide to Trusts

Guide to Trusts

Placing the HSBC Onshore Investment Bond in trust

This can be effective as part of an estate planning strategy. The HSBC Onshore Investment Bond can be placed in a new or existing trust. HSBC Life offer a range of trusts are available on an absolute or discretionary basis, can invest in the HSBC Onshore Investment Bond and are provided at no additional cost.

HSBC Gift Trust

An HSBC Life Gift Trust can be useful in Inheritance Tax planning and mitigation. It allows the client to place capital in a trust which falls outside of their estate for Inheritance Tax purposes, provided they live for at least seven years from the creation of the trust. Click below to learn more and get answers to many of the most frequently asked questions on Gift Trusts.

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HSBC Loan Trust

With an HSBC Life Loan Trust, a cash sum loaned to the trust is used for investment. Any growth in the investment isn’t included in the client’s estate for Inheritance Tax purposes. Discover more information to consider whether a Loan Trust might be suitable for your client’s estate planning. You will also find answers to several common Loan Trust questions.

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HSBC Discounted Gift Trust

An HSBC Life Discounted Gift Trust allows your client to place capital in a trust. For Inheritance Tax purposes, part of the trust may fall outside of their estate. Your client can take regular payments from the trust during their lifetime. Read about the Inheritance Tax implications and other key facts about Discounted Gift Trusts below.

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Features and Benefits

Onshore investment bonds held in a trust provide a number of potential benefits:

  • Simple arrangement and administration
  • Tax efficiency.

Important Information

  • The HSBC Onshore Investment Bond is not designed for non – taxpayers, non – UK residents or short-term (less than 5 years) investors. The value of investments can fall as well as rise and your client may not get back what they invested. For some investments this can also happen as a result of exchange rate fluctuations as shares and funds may have an exposure to overseas markets. HSBC Life (UK) Limited cannot be held responsible for the investment performance of your client’s bond. The value of any tax benefits described depends on individual client circumstances. Tax rules and rates may change in the future. HSBC Life (UK) Limited cannot be held responsible for any future changes in legislation.

  • HSBC Life has a wealth of Trust experience to share. Our taxation and Trust Manager has over 37 years’ experience dealing with tax and trust matters.

    In addition, HSBC Life has partnered with Technical Connection to help us provide comprehensive support for financial advisers.

Trustee Investment

Onshore investment bonds held in a trust provide a number of potential benefits:

  • Simple administration. No tax returns or reporting/registration requirements unless a chargeable event arises
  • Capital gains generated within the bond are not subject to capital gains tax in respect of the bond holder
  • The 45% income tax rate which is applicable to discretionary trusts can be deferred until surrender – with a 20% tax credit for UK onshore investment bonds
  • Investment bond segments can be assigned to basic rate/non tax-paying beneficiaries whose tax on surrender will be based on their personal tax position
  • The trustee standard rate band is available if tax assessment falls upon the trust
  • Multiple lives assured provides flexibility and means onshore investment bonds can continue until the last life assured dies
  • Open architecture onshore investment bonds allow trustees to with work financial advisers to construct a suitable investment portfolio for the trust. Changes to risk profile and/or investment objectives can be accommodated without creating a chargeable event
  • Tax on underlying UK funds at a maximum 20% rate

Useful trust documents

  • At HSBC Life we know we can only succeed with you by our side. This is why we’re committed to supporting financial advisers in every way we can.