A dies owning an investment bond, but the life assured is her former husband (still alive) B. It appears that B assigned the bond to A after their divorce. The bond is surrendered by A's executor and the chargeable event certificate is addressed to A, and shows A as the bond owner. I believe no income tax is due from the executor of A, as basic rate tax is deemed to have been paid. The whole estate is in held on a discretionary trust. Do the bond proceeds pass to the Trust as income, carrying a tax credit, so that the trustees have to pay a further 25% income tax, or do the proceeds pass as capital, and are not taxable in the hands of the Trustees?