deed of assignment bond

Deed of Assignment (for Intellectual Property)

In the realm of intellectual property, a Deed of Assignment is a formal legal document used to transfer all rights, title, and interest in intellectual property from the assignor (original owner) to the assignee (new owner). This is crucial for the correct transfer of patents, copyrights, trademarks, and other IP rights. The deed typically requires specific legal formalities, sometimes notarization, to ensure it is legally enforceable.

To be legally effective a deed of assignment must contain:

• Title of the Document : It should clearly be labeled as a "Deed of Assignment" to identify the nature of the document.
• Date : The date on which the deed is executed should be clearly mentioned.
• Parties Involved : Full names and addresses of both the assignor (the party transferring the rights) and the assignee (the party receiving the rights). This identifies the parties to the agreement.
• Recitals : This section provides the background of the transaction. It typically includes details about the ownership of the assignor and the intention behind the assignment.
• Definition and Interpretation : Any terms used within the deed that have specific meanings should be clearly defined in this section.
• Description of the Property or Rights : A detailed description of the property or rights being assigned. For intellectual property, this would include details like patent numbers, trademark registrations , or descriptions of the copyrighted material.
• Terms of Assignment : This should include the extent of the rights being transferred, any conditions or limitations on the assignment, and any obligations the assignor or assignee must fulfill as part of the agreement.
• Warranties and Representations : The assignor typically makes certain warranties regarding their ownership of the property and the absence of encumbrances or third-party claims against it.
• Governing Law : The deed should specify which jurisdiction's laws govern the interpretation and enforcement of the agreement.
• Execution and Witnesses : The deed must be signed by both parties, and depending on jurisdictional requirements, it may also need to be witnessed and possibly notarized.
• Schedules or Annexures : If there are detailed lists or descriptions (like a list of patent numbers or property descriptions), these are often attached as schedules to the main body of the deed.

Letter of Assignment (for Trademarks and Patents)

This is a less formal document compared to the Deed of Assignment and is often used to record the assignment of rights or licensing of intellectual property on a temporary or limited basis. While it can outline the terms of the assignment, it may not be sufficient for the full transfer of legal title of IP rights. It's more commonly used in situations like assigning the rights to use a copyrighted work or a trademark license.

For example, company X allows company Y to use their trademark for specific products in a specific country for a specific period.  

At the same time, company X can use a Letter of Assignment to transfer a trademark to someone. In this case, it will be similar to the Deed of Assignment. 

Intellectual Property Sales Agreement

An IP Sales Agreement is a detailed contract that stipulates the terms and conditions of the sale of intellectual property. It covers aspects such as the specific rights being sold, payment terms, warranties regarding the ownership and validity of the IP, and any limitations or conditions on the use of the IP. This document is essential in transactions involving the sale of IP assets.

However, clients usually prefer to keep this document confidential and prepare special deeds of assignment or letter of assignment for different countries.

IP Transfer Declaration

In the context of intellectual property, a Declaration is often used to assert ownership or the originality of an IP asset. For example, inventors may use declarations in patent applications to declare their invention is original, or authors may use it to assert copyright ownership. It's a formal statement, sometimes required by IP offices or courts.

When assigning a trademark, the Declaration can be a valid document to function as a proof of the transfer. For example, a director of company X declares that the company had sold its Intellectual Property to company Y. 

Merger Document

When companies or entities with significant IP assets merge, an IP Merger Document is used. This document outlines how the intellectual property owned by the merging entities will be combined or managed. It includes details about the transfer, integration, or handling of patents, copyrights, trademarks, and any other intellectual property affected by the merger.

In all these cases, the precise drafting of documents is critical to ensure that IP rights are adequately protected and transferred. Legal advice is often necessary to navigate the complexities of intellectual property laws.

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Deed of Assignment: Everything You Need to Know

A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another. 3 min read updated on January 01, 2024

Updated October 8,2020:

A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another. It states that a specific piece of property will belong to the assignee and no longer belong to the assignor starting from a specified date. In order to be valid, a deed of assignment must contain certain types of information and meet a number of requirements.

What Is an Assignment?

An assignment is similar to an outright transfer, but it is slightly different. It takes place when one of two parties who have entered into a contract decides to transfer all of his or her rights and obligations to a third party and completely remove himself or herself from the contract.

Also called the assignee, the third party effectively replaces the former contracting party and consequently assumes all of his or her rights and obligations. Unless it is stated in the original contract, both parties to the initial contract are typically required to express approval of an assignment before it can occur. When you sell a piece of property, you are making an assignment of it to the buyer through the paperwork you sign at closing.

What Is a Deed of Assignment?

A deed of assignment refers to a legal document that facilitates the legal transfer of ownership of real estate property. It is an important document that must be securely stored at all times, especially in the case of real estate.

In general, this document can be described as a document that is drafted and signed to promise or guarantee the transfer of ownership of a real estate property on a specified date. In other words, it serves as the evidence of the transfer of ownership of the property, with the stipulation that there is a certain timeframe in which actual ownership will begin.

The deed of assignment is the main document between the seller and buyer that proves ownership in favor of the seller. The party who is transferring his or her rights to the property is known as the “assignor,” while the party who is receiving the rights is called the “assignee.”

A deed of assignment is required in many different situations, the most common of which is the transfer of ownership of a property. For example, a developer of a new house has to sign a deed of assignment with a buyer, stating that the house will belong to him or her on a certain date. Nevertheless, the buyer may want to sell the house to someone else in the future, which will also require the signing of a deed of assignment.

This document is necessary because it serves as a temporary title deed in the event that the actual title deed for the house has not been issued. For every piece of property that will be sold before the issuance of a title deed, a deed of assignment will be required.

Requirements for a Deed of Assignment

In order to be legally enforceable, an absolute sale deed must provide a clear description of the property being transferred, such as its address or other information that distinguishes it from other properties. In addition, it must clearly identify the buyer and seller and state the date when the transfer will become legally effective, the purchase price, and other relevant information.

In today's real estate transactions, contracting parties usually use an ancillary real estate sale contract in an attempt to cram all the required information into a deed. Nonetheless, the information found in the contract must be referenced by the deed.

Information to Include in a Deed of Assignment

• Names of parties to the agreement
• Addresses of the parties and how they are binding on the parties' successors, friends, and other people who represent them in any capacity
• History of the property being transferred, from the time it was first acquired to the time it is about to be sold
• Agreed price of the property
• Size and description of the property
• Promises or covenants the parties will undertake to execute the deed
• Signatures of the parties
• Section for the Governors Consent or Commissioner of Oaths to sign and verify the agreement

If you need help understanding, drafting, or signing a deed of assignment, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

• Define a Deed
• Contract for Deed California
• Contract for Deed in Texas
• Assignment Law
• Deed Contract Agreement
• Assignment Of Contracts
• Legal Assignment
• Deed vs Agreement
• Assignment Legal Definition
• Contract for a Deed

• Insights & events

Assigning debts and other contractual claims - not as easy as first thought

Harking back to law school, we had a thirst for new black letter law. Section 136 of the Law of the Property Act 1925 kindly obliged. This lays down the conditions which need to be satisfied for an effective legal assignment of a chose in action (such as a debt). We won’t bore you with the detail, but suffice to say that what’s important is that a legal assignment must be in writing and signed by the assignor, must be absolute (i.e. no conditions attached) and crucially that written notice of the assignment must be given to the debtor.

When assigning debts, it’s worth remembering that you can’t legally assign part of a debt – any attempt to do so will take effect as an equitable assignment. The main practical difference between a legal and an equitable assignment is that the assignor will need to be joined in any legal proceedings in relation to the assigned debt (e.g. an attempt to recover that part of the debt).

Recent cases which tell another story

Why bother telling you the above?  Aside from our delight in remembering the joys of debating the merits of legal and equitable assignments (ehem), it’s worth revisiting our textbooks in the context of three recent cases. Although at first blush the statutory conditions for a legal assignment seem quite straightforward, attempts to assign contractual claims such as debts continue to throw up legal disputes:

• In  Sumitomo Mitsui Banking Corp Europe Ltd v Euler Hermes Europe SA (NV) [2019] EWHC 2250 (Comm),  the High Court held that a performance bond issued under a construction contract was not effectively assigned despite the surety acknowledging a notice of assignment of the bond. Sadly, the notice of assignment failed to meet the requirements under the bond instrument that the assignee confirm its acceptance of a provision in the bond that required the employer to repay the surety in the event of an overpayment. This case highlights the importance of ensuring any purported assignment meets any conditions stipulated in the underlying documents.
• In  Promontoria (Henrico) Ltd v Melton [2019] EWHC 2243 (Ch) (26 June 2019) , the High Court held that an assignment of a facility agreement and legal charges was valid, even though the debt assigned had to be identified by considering external evidence. The deed of assignment in question listed the assets subject to assignment, but was illegible to the extent that the debtor’s name could not be deciphered. The court got comfortable that there had been an effective assignment, given the following factors: (i) the lender had notified the borrower of its intention to assign the loan to the assignee; (ii) following the assignment, the lender had made no demand for repayment; (iii) a manager of the assignee had given a statement that the loan had been assigned and the borrower had accepted in evidence that he was aware of the assignment. Fortunately for the assignee, a second notice of assignment - which was invalid because it contained an incorrect date of assignment - did not invalidate the earlier assignment, which was found to be effective. The court took a practical and commercial view of the circumstances, although we recommend ensuring that your assignment documents clearly reflect what the parties intend!
• Finally, in Nicoll v Promontoria (Ram 2) Ltd [2019] EWHC 2410 (Ch),  the High Court held that a notice of assignment of a debt given to a debtor was valid, even though the effective date of assignment stated in the notice could not be verified by the debtor. The case concerned a debt assigned by the Co-op Bank to Promontoria and a joint notice given by assignor and assignee to the debtor that the debt had been assigned “on and with effect from 29 July 2016”. A subsequent statutory demand served by Promontoria on the debtor for the outstanding sums was disputed on the basis that the notice of assignment was invalid because it contained an incorrect date of assignment. Whilst accepting that the documentation was incapable of verifying with certainty the date of assignment, the Court held that the joint notice clearly showed that both parties had agreed that an assignment had taken place and was valid. This decision suggests that mistakes as to the date of assignment in a notice of assignment may not necessarily be fatal, if it is otherwise clear that the debt has been assigned.

The conclusion from the above? Maybe it’s not quite as easy as first thought to get an assignment right. Make sure you follow all of the conditions for a legal assignment according to the underlying contract and ensure your assignment documentation is clear.

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Assignment of an Investment Bond

Table of Contents

What is an Assignment? It is a change of ownership of a life insurance investment bond or capital redemption bond or assignment of policy ‘segments’ of either type of investment bond. The change of ownership is supported by a proper legal document – a deed of assignment.

When you assign an investment bond or policy segment the person you have assigned it to becomes the beneficial owner, as if they had owned the bond from day one i.e. the start date of the investment.

What are the Benefits of Assigning?

No Capital Gains Tax : It is possible to gift an investment bond to an adult child without causing a capital gains tax charge. Gifting other types of investment would be a disposal for capital gains tax purposes.

No Initial Income Tax Charge: An assignment does not trigger a chargeable event and does not give rise to an income tax charge, provided the assignment is not for money or money’s worth. If you are making a gift then that is not for money or money’s worth.

Transfer to a Trust: It is possible to transfer an investment bond to an individual or to a trust for inheritance tax planning without causing an income tax or capital gains tax charge.

Minimise Income Tax: Providing an outright gift is made it’s possible to minimise income tax on encashment by putting the investment bond or segments of the investment bond into the hands of a taxpayer who will pay a lower rate of tax on encashment.

Inheritance Tax Planning: The assignment is technically a gift for Inheritance Tax purposes. Any gift you make is taken into account for Inheritance Tax purposes. If you survive for 7 years after making the gift then the full value of the bonds should fall outside your estate for Inheritance Tax calculation purposes.

Other Tax Planning Opportunities when Assigning a Bond

University Funding – A policyholder can assign an investment bond to an adult child to cover university costs at a time when the child’s personal allowance is unused and/or there would be no further tax to pay on an onshore investment bond because any gain, or top-sliced gain, would be within the basic rate tax bracket (assuming the student is a non, lower or basic rate taxpayer). By assigning your bonds they can use them for themselves if needed and when needed to provide financial assistance through university. It may even be that you gradually assign bonds over to fund education.

Efficient Income Planning – Assigning the policy to a lower rate tax payer within your family when/if income or capital needs as again, similar to the above, you can control tax liabilities.

Disadvantages of Assignment

The bond is now owned by another person. You lose control, it is not your money anymore.

If this new person/owner dies then the full value of the bond could be taken into account for inheritance tax if you have not used a trust.

If this new owner divorces then the full value of the bonds could be taken into account in any divorce settlement.

Insurance investment bonds represent one of the most flexible investment products available in the market and have been so since 1968 (when the relvant tax law came into force).

They are tax efficient in terms of the underlying assets growing free of any deduction of capital gains tax or income tax, they also attract both time apportionment relief and top slicing relief.

Currently, insurance bonds may not be included in any means tests (for example, for care home fee’s).

Finally, as mentioned above, bonds can easily have ownership changes by deed of assigment or be placed in trust (as they are life insurance fund investments) – this can offer excellent opportunities for tax and estate planning.

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Bond For Deed

A Bond for Deed is a contract to sell real estate property, in which the purchase price is to be paid by the buyer to the seller in installments. After the total amount is paid, the buyer receives the title from the seller. Whenever a real estate transaction involves financing, a Bond for Deed should be considered as an alternative method of financing.

Resources (PDFs)

• Bond For Deed Booklet
• Bond For Deed Purchase Agreement
• Bond For Deed Form

Applicability

It is suggested that such a Bond for Deed contract should be considered for use by a Seller, Buyer, Broker or Agent whenever:

• The purchaser cannot qualify to obtain a new loan or to assume the existing loan, but the seller is satisfied with the purchasers credit.
• The property does not qualify for a new loan, but the purchaser is satisfied with the price and condition of the property.
• The required closing costs to obtain a new mortgage loan are prohibitive.
• Permission to assume is conditioned upon payment of an unreasonable transfer fee (such as 1% or 2% of the loan balance) and/or in an increase in the interest rate on the existing loan.
• The due on sale clause in a mortgage (or the La. statutory due on sale found in R.S. 6:833) is used by the lender to prohibit any assumption of the existing loan(s).
• The seller desires to maintain the security of retaining title and eliminating the legal expense and delays of a judicial foreclosure in the event of a default by the purchaser. This is particularly beneficial if the seller finances a portion of the purchase price.
• The seller agrees to allow the purchaser to assume or take over responsibility for the mortgage payments, but requires that the purchaser must refinance and pay off the existing mortgage loan within a specified period of time (such as within five years).
• Any combination of the above.

Most frequent questions and answers

The Bond for Deed contract is assignable to a third party. Typically such an Assignment is made by the Purchaser to a third party. Typically such an Assignment is made by the Purchaser to a new Purchaser who takes over the rights and responsibilities of the original Purchaser.

The death of a Seller or Buyer does not affect the validity of a Bond for Deed. As a heritable contract under La. Civil Code Articles 1765 & 1984, it is effective by or against the heirs or estate of a descendent.

The Homestead Exemption is not available in some La. Parishes, such as Jefferson and some Districts in Orleans; it has been granted in other parishes and some Orleans Districts.

Along with the responsibility for repairs, maintenance, etc., is transferred to the Purchaser at the closing of the Bond for Deed contract.

Is carried by the Purchaser in the names of all parties-Seller, Purchaser, and Mortgagee(s).

Is available to insure the validity of the Seller’s title that is to be conveyed to the purchaser under the Bond for Deed-subject to the express condition that the Purchaser pay the amounts contracted for or in the Bond for Deed.

In the event the Seller files a bankruptcy action, the Purchaser is protected by the Bankruptcy Code, 11 U.S.C., Sec. 365 (i) and the law as applied in the case of In Re Smith, 71 B.R. 754 (Bankruptcy M.D. La.)

In the event of default by either party, the other party may sue for Specific Performance. Additionally the Seller may have the Bond for Deed cancelled in accordance with the provisions of R.S. 9:2945 as explained above. In such event, the Seller need not file a foreclosure suit to reacquire title of the property.

The I.R.S. treats a Bond for Deed the same as a Sale. Accordingly, the determination of gain or loss by the Seller and deductions for interest or depreciation expense by the Purchaser is treated the same as if there had been an ordinary sale. The case law on this point is found in:

Our Bond for Deed contract provides that the Seller give a power of attorney to the named Escrow Agent empowering the Escrow Agent to transfer title to the subject property in accordance with the provisions of the contract. This protects the Purchaser in the event the Seller has moved away or it is otherwise inconvenient for the Seller to appear at Act of Sale after the Purchaser has made all payments.

The Bond for Deed contract is recorded in both the conveyance and mortgage records. Additionally, we include a special mortgage in favor of the Purchaser to protect the Purchaser’s rights in the event of a subsequently arising encumbrance, such as a judgment or an I.R.S. tax lien. The rights of the Purchaser are superior to subsequently recorded inscriptions.

The Purchaser can take title in his own name at any time by paying the balance due on the Bond for Deed. Mostly commonly this occurs by refinancing (if interest rates go down) or reapplying to qualify for an assumption of the existing mortgage.

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Assignment or Appointment

Explains how the ability to move the tax on a chargeable gain can be a valuable tax planning tool.

One of the advantages of investment bonds is the ability to move the tax point away from the original owner to another. This strategic planning benefit can be used with investment bonds held individually or within a trust and coupled with an effective exit strategy can help reduce the tax payable on a chargeable gain.

Individually held bonds

An assignment is a process whereby one person, the assignor, transfers assets to another person, the assignee, who becomes the new owner of the assets.

This mechanism allows the tax point of an investment bond to be deflected away from the original owner to a new owner. The benefit of being able to assign, or change policy ownership, is that the transaction is not a chargeable event for the purposes of income tax, provided that it is a genuine gift and has not been assigned for money or money’s worth.

Where an assignment is made as part of a divorce settlement HMRC will only treat the assignment as a gift if it is specifically mentioned in the court order. If it is not mentioned then the assignment would be treated as a gift for money or money’s worth, making it a chargeable event.

It could be that the new owner pays tax at a lower rate, or better still, is a non-taxpayer. As the new owner they would have the authority to surrender the policy and pay tax (if applicable) on the chargeable gain, at their marginal rate of income tax.

Remember, if the new owner is an individual the assignment would be a potentially exempt transfer for inheritance tax purposes, unless it is covered by any available exemptions. If the new owner is a trust the assignment would either be a potentially exempt transfer or a chargeable lifetime transfer, depending on whether the trust is absolute or discretionary.

If the assignment is between a married couple or civil partners and the proceeds benefit both of the original owners and not just the new owner, HMRC might look at the overall transaction rather than the individual steps and apply tax accordingly.

There are no time constraints on the new owner to surrender the bond. If the surrender is deferred following assignment, additional years of top-slicing relief could accumulate and potentially mitigate the tax liability, when it is ultimately surrendered. Additionally, if dealing with an offshore bond, the timing aspect should focus on the appropriate tax year to surrender so that the bond gain can soak up what remains of the new policy owner’s personal allowance, starting rate band for savings income and personal savings allowance.

Investment bonds held by trustees

Even where an investment bond is held under a trust the trustees still have the ability to assign ownership from themselves to a beneficiary, rather than surrendering the bond within the trust and distributing cash.

Where an investment bond is held in a discretionary trust, any chargeable gain is assessed on the settlor if the chargeable event occurs while the settlor is alive at any point in the tax year and is UK resident.

If the settlor cannot be taxed because they died in a previous tax year or they are non-UK resident, the chargeable gain is assessed on a UK trust. This means that a UK trust could potentially pay up to 45% tax on an offshore bond gain or 25% on an onshore bond gain.

Moving the tax point to a beneficiary can result in a better tax position because that beneficiary could potentially be a lower taxpayer, have sufficient personal allowances to soak up any gains and be entitled to use top-slicing relief.

When dealing with a discretionary trust the trustees have two options; they can either assign legal ownership to the beneficiary for them to hold individually or use a deed of appointment to create a bare trust.

Where the beneficiary is over 18 and so can legally own an investment bond, the trustees can complete an assignment. As the trustees are distributing rights under the trust it is not a chargeable event for the purposes of income tax but there could potentially be an inheritance tax exit charge.

The beneficiary then becomes the legal owner of the bond meaning that any chargeable gains would be taxed at their marginal rate of tax.

Where there are minor beneficiaries who cannot legally own an investment bond, instead of assigning the bond the trustees can execute a deed of appointment to create a bare trust. The trustees remain the owners of the bond but the impact of the appointment is to effectively carve out the policies for the minor beneficiaries. Any chargeable gain under a bare trust is assessed on the beneficiary, so this moves the tax point to the minor beneficiary.

However, remember that if the parents of a minor beneficiary establish a trust, any distribution to that minor beneficiary (whilst unmarried or in a civil partnership) which results in a chargeable gain exceeding £100 in the tax year will all be taxed on the parent.

• The ability to assign or appointinvestment bonds to newowners can be a valuabletax planning tool.
• The assignment or appointment is usually not achargeable event which gives owners the opportunityto plan suitable exit strategies.
• The ability to move the tax point allows anysubsequent chargeable gains to be assessedon a lower or non-taxpayer.

This document is based on Canada Life’s understanding of applicable UK tax legislation and current HM Revenue & Custom’s practice, as at May 2019 and could be subject to change in the future. It is provided for professional advisers only. Any recommendations are the adviser’s sole responsibility.

• Practical Law

Deed of assignment

Drafting a Deed of Assignment

I have been instructed to prepare a Deed of Assignment in respect of two investment bonds put into effect in 2015. It is now clear they were incorrectly set up by the financial adviser, so that the Trustee has the benefit personally, rather than holding as Trustee. My question is, do I need to make any reference to this in the Deed?

Changes to investment bonds is typically undertaken with the provider. They usually have they’re own paperwork.

I’d contact the provider first, I’m assuming you wish to make changes to the beneficiaries.

Richard Bishop PFEP

Hi Richard.

Thanks for responding. In this case its the insurance company that referred the matter to us, I can only think its perhaps because it was their mistake initially and they are paying our costs that they have asked us to do it.

Gail Weston

Is this a bigger issue than just drafting a deed of assignment?

If the 2015 assignment effectively gave the bonds to the intended trustee personally, might not the assignment into trust be considered a settlement by them for IHT purposes, etc.?

If the 2015 assignment had the wrong effect I wonder if it should be remedied by an application to court for rectification. If the original transaction is not rectified, the mere completion of a new deed of assignment may fully utilise the “trustee’s” IHT nil rate band, significantly inhibiting their ability to conduct any IHT planning themselves. Should they die within 7 years of the new deed, their estate will be penalised if their nil rate band is no longer available as a result of what happens now.

I suggest it would be appropriate to contact HMRC before any documents are executed, to see if it will agree to look through the proposed deed to the original intention. This may seem over cautious, but I understand HMRC consistently asserts that it will not accept “rectification” of a mistake without a court order.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Thank you. It was for that reason I thought we must have to do something to show the trustee is not making a settlement personally, but I wondered if the error could somehow be referred to in a Deed of Assignment so that it was clear.

Another member pointed out that a trust doesn’t have to be in writing (other than land) and suggested the legal owner might execute a Declaration of Trust to confirm how she holds the bonds, but making it clear that the trust was established when the bonds were first assigned to her. Could that work? Thank you for responding. I do very little trust work, but I know enough to know when to be wary and I think I might now refer this on to someone else!

Gail Weston WMB Law Ltd

What trusts would she arguably hold the bonds upon? The relevant trusts would have to have been at least ascertainable at the time of acquisition of the bonds. The only one of the vital Three Certainties here seems to have been the subject-matter. It is a stretch to conclude that she originally acquired as trustee unless she did so knowingly as such and beyond a vague understanding (e.g. as a constructive trustee, when it would be a key part of the analysis to be able to identify the beneficiary also). If it appears so definitively that she took originally as beneficiary, however mistakenly, retrospection is not an option. In law the Trustee is just not a trustee at all it would seem.

The remedy the law provides is rectification which is discretionary, but awarded or denied according to established principle, and subject to evidence about the nature of the mistake alleged. As Paul says, HMRC’s practice is to insist on a court order— but rarely to intervene in the process and to abide by the outcome. This is reasonable because an order will bind all persons interested, including the bond provider, whereas if HMRC just took a unilateral view (second-guessing the court’s discretion) that in theory might be successfully challenged and it might not even bind the taxpayer.

A bond provider will be reluctant to pay out anyone other than the apparent legal owner or their assignee, to obtain a good discharge. Asserting that the bonds are really held on some trust is likely to spook them. Here the matter is referred by them and, without prejudice as to culpability, indicates some kind of notice of a possible trust with at least a resultant strong doubt on their part about whom to pay. An assignment apparently fixes that but is not retrospective. It still involves their taking a view that the “Trustee” has the right to act as assignor but the assignee may be the only person or persons who might otherwise contest her personal entitlement.

It is not clear whether there is recourse against the financial adviser or bond provider (or admission of liability or creditworthiness) or precisely whose mistake is alleged to be operative and why, or the value at stake. Indeed it is not clear who is your client and what are your instructions. The bond provider may be paying and be the client for the mechanical drafting but it seems the “Trustee” is the likely client for the advice as the intending assignor. Is there a conflict?

Jack Harper

Thank you for your response. Sorry, I probably should have given more detail. The Trustee is my client. She was referred to me by a Wealth Management Company, who are paying her costs. She holds on the trusts of her late sisters Will for minor beneficiaries and took advice from them the company on where to invest. The trust funds were subsequently invested in two Bonds with that Company, but the clients new adviser has now spotted that apparently the Bonds were set up as though she herself was the owner and beneficiary, instead of holding as Trustee.

In those circumstances there must be a strong inference that she is a constructive trustee of the bonds. She has used trust funds to subscribe for the bonds. Equity would not permit her to hold them otherwise than on the existing Will trusts. If she is the sole trustee an assignment is somewhat over the top. Although you can assign to yourself in a different capacity here she would be a trustee on both sides, constructive as assignor and appointed as assignee. I suggest all she needs is to receive positive legal advice that she needs to do nothing and why. Even appointing a co-trustee just for a meaningful assignment seems excessive if the Will trust is not one of land and if is not considered desirable otherwise e.g. to secure trusteeship succession.

In agreement with Jack, as the individual knows the terms on which they are supposed to be holding the bonds (here, the trusts which are set out in the Will), the individual can execute a Declaration of Trust stating that. Similarly, I would recommend a second trustee - indeed, the terms of some Will trusts require there to be two trustees for the exercise of certain powers. If a second trustee is going to be added, the Deed of Assignment (from “Trustee A” to “Trustee A and Trustee B” could set out initially that Trustee A holds the bonds on the trusts of the Will, before the assignment to A&B “… to hold on the terms of those trusts…” (or similar). It is worth being absolutely sure that, at the time of the original investment, there was no intention that the bonds (or the funds used to invest in them) should belong beneficially to A. Gail says that this was not the intention, but any evidence of that (eg correspondence, attendance notes, etc) would be useful to keep should the position be queried in the future.

Paul Davidoff New Quadrant

I would only add to Paul’s sound comments and action plan that if she used trust funds to subscribe she would hold the bonds as a constructive trustee even if she had had the actual intention of benefiting personally

Thank you both. That way makes sense to me. There was never any intention of benefitting personally. Until learning otherwise, she believed the trust funds were rightly invested for her nieces. As you suggest I will see what paperwork exists from the end of the administration period and proceed as you suggest.

Many thanks. Gail Weston