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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.

Which trust meets your clients’ needs?

Gift Trust, Discounted Gift Trust or Loan Trust? Find out which meets your client’s needs.
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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

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 

Quick links

Focussed resources