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Trusts

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.

  • A method of investing capital and removing it from a client’s estate for IHT purposes. Find out how a Gift Trust works, how to set one up, plus all the key benefits.

    • A method of investing capital and removing the growth from a client’s estate, whilst receiving regular loan repayments to supplement income. Find out how a Loan Trust works, how to set one up, plus all the key benefits.

    • A method of investing capital and removing part of it from a client’s estate, whilst giving access to regular withdrawals. Find out how a Discounted Gift Trust works, how to set one up, plus all the key benefits.

      Which trust meets your clients’ needs?

      Gift Trust, Discounted Gift Trust or Loan Trust? Find out which meets your client’s needs.
      Use our simple tool to establish what’s best for your client.

      Click to view page: Trust decision tree

      HSBC Life (UK) Limited (HSBC) has an array of solutions for estate planning and the purpose of this interactive guide is to help advisers understand the trust options available for use with the HSBC Onshore Investment Bond. It is for guidance only and should not be taken as financial advice. The choice of trust should be based on your full assessment of your client’s individual needs and circumstances. This information is based on our understanding and interpretation of UK tax legislation as at 16.1.2023, which may be subject to change.

      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 

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