St James place advisor

jjimjam

Fair enough, you're the one who knows the full story, I was just picking up on the apparently wary conversations between you:

jjimjam said:

I ask questions but never really get a very satisfactory answer. It sounds like he either doesn't know,  or he thinks I won't understand, or he's bluffing to avoid losing the account.

However, if he's actively seeking your assistance then that's different!

Oh no!     That's the conversation between me and the adviser!   My dad and I talk to the adviser together.  Thinking about it, I'm a trustee which probably make a difference regarding power of attorney.

HappyHarry

jjimjam said:

It was set up as a gift and loan trust more than 20 years ago by my parents - one has died.  Certainly it was to do what gift and loan trusts do, i.e. provide income for 20 years and avoid IHT on the growth.   The income ended some time ago, so it's sort of just there, slowly growing.    Dad wants to pass it on now to be useful.    It's too complicated and big for me to ignore the advice.   My own understanding is that an investment bond can be transferred, to beneficiaries, they can surrender the bond and pay the tax.  If they are basic rate tax payers then there won't be any tax to pay.   Or is the problem that a settlor is still alive?

That is pretty much spot on with a gift and loan trust. The only bit I would add is that the growth will be taxable at the marginal rate of whoever owns it at time of surrender. If it is an onshore bond then basic rate tax will already have been paid. 

The beneficiaries may need to be  become clients of SJP though - the bonds they use may require it.

jjimjam

HappyHarry said:

That is pretty much spot on with a gift and loan trust. The only bit I would add is that the growth will be taxable at the marginal rate of whoever owns it at time of surrender. If it is an onshore bond then basic rate tax will already have been paid. 

The beneficiaries may need to be  become clients of SJP though - the bonds they use may require it.

That's fantastic thanks.   
I still don't see why there is a difference where the settlor is alive and when they have died.   The adviser basically says it should be not be withdrawn when dad is alive - for tax reasons.  Admittedly I have found out the stuff about transferring bonds since our last discussion.

As soon as you say beneficiaries may need to be become clients of SJP I start thinking about their fees.   It's certainly stuff I can ask direct straight forward questions about though.  

wjr4

I’d be looking for your own IFA & making sure SJP don’t force you to use their rep. 

Mothman

Are you sure it's an onshore bond as many companies use offshore bonds for this type of product. Basic rate tax is NOT deemed to have been paid on offshore bonds.

Albermarle

jjimjam said:

Just applying for power of attorney at the moment.   I don't think it's that though.

Just be aware that even if you have PoA, that normally if your Dad is still of sound mind, then normally the PoA would not be activated. In other words it would all be in place for the future, but not for use now.

So just because you have the PoA registered, does not necessarily mean a financial provider will deal direct with you.

I think there some grey areas where the donor wishes the PoA to act for them even if they are of sound mind and/or if the donor has some cognitive decline but it varies from day to day. I am not an expert so you probably need to research this.

Keep_pedalling

YAlbermarle said:

jjimjam said:

Just applying for power of attorney at the moment.   I don't think it's that though.

Just be aware that even if you have PoA, that normally if your Dad is still of sound mind, then normally the PoA would not be activated. In other words it would all be in place for the future, but not for use now.

So just because you have the PoA registered, does not necessarily mean a financial provider will deal direct with you.

I think there some grey areas where the donor wishes the PoA to act for them even if they are of sound mind and/or if the donor has some cognitive decline but it varies from day to day. I am not an expert so you probably need to research this.

A financial LPA can be used prior to the donor loosing capacity with the permission of the donor. 

Barkin

Keep_pedalling said:

YAlbermarle said:

jjimjam said:

Just applying for power of attorney at the moment.   I don't think it's that though.

Just be aware that even if you have PoA, that normally if your Dad is still of sound mind, then normally the PoA would not be activated. In other words it would all be in place for the future, but not for use now.

So just because you have the PoA registered, does not necessarily mean a financial provider will deal direct with you.

I think there some grey areas where the donor wishes the PoA to act for them even if they are of sound mind and/or if the donor has some cognitive decline but it varies from day to day. I am not an expert so you probably need to research this.

A financial LPA can be used prior to the donor loosing capacity with the permission of the donor. 

It's a choice that's made when the LPA is set up. 
The LPA can specify that the attorney/s can act either as soon as the LPA is registered with OPG, or only when the donor has lost mental capacity.