Who is liable for tax on a 'chargeable event'?

MargaretO

My mother passed away in August 2015. She was the policy holder for a Prudential investment bond that she and my dad set up to benefit my two daughters. On her death the bond was wound up and paid out to my two daughters equally. I have received a ‘chargeable event certificate’ relating to this and am not sure what to do with this.

Primarily I am not sure who the tax liability falls on. It appears, from the wording of the certificate that it would be the policy holder, my mother, but she is deceased. Do I need to fill out a tax return in my deceased mother’s name? Or does the tax liability fall onto the beneficiaries ie my daughters? Or am I liable as a trustee of this bond and in that case do I have to enter the information on the certificate on my own self-assessment form?

I am finding the whole thing very hard to understand!

NordicNoir

Margaret, this should be able to help you:

http://www.pruadviser.co.uk/content/knowledge/technical-centre/taxation_uk_investment_bonds/

... not very exciting reading I'm afraid!

[Deleted User]

Margaret, check the wording on the chargeable event certificate. Does it state that basic rate tax is deemed paid?

On chargeable events there is normally no further tax to pay unless the policy holder is a higher rate taxpayer. Even then reliefs are available.