Quilter 5 A trust solution providing only the best for your family How the Best Start in Life Trust works You first invest into a Collective Investment Bond with the intention of achieving long-term capital growth. Once your bond has been set up, you gift it into a settlor excluded discretionary trust. Legal ownership is thus transferred to the trustees. The bond then forms the trust fund. ‘Settlor-excluded’ means that you will no longer have any access to or benefit from, the investment. The bond is made up of 1,000 separate policies that can be cashed in individually to pay the beneficiaries at the discretion of the trustees. Paying out benefits When the trustees, guided by your wishes stated at the start of the trust, decide to provide benefits to a beneficiary, such as to a minor grandchild for their school fees, they complete a ‘deed of appointment’. This will ring-fence a specified number of bond policies so they are held absolutely for the beneficiary named in the deed of appointment. This ring- fenced portion of the trust will be held on ‘bare trust’ for the named beneficiary. The remainder of the policies within the bond will stay in the discretionary portion of the trust and can be similarly appointed to any discretionary beneficiary at any time. The trustees can then cash in those policies. Whilst the surrender of the policies will be a chargeable event for tax purposes, any chargeable gain will be assessable on the minor beneficiary. It avoids the tax assessment being based on your tax position or that of the trustees (as described on Page 3). I want to pay my grandchild’s private school fees.