Ultimate upgrade from Live Gold - confused!

So I did manage to get my knickers in a twist with trying to figure out the "£1 month upgrade to Ultimate and then £10.99 per month deal". i'd appreciate someone turning the gobbledygook into plain english for me please!

If I load up my son's xbox/Microsoft account with 36 months of Live Gold, and THEN apply the current "£1 month upgrade to Ultimate and then £10.99 per month deal", then WILL all 36 months of Live Gold become 36 months of Ultimate? If the answer to that is
'yes', then what happens to the "£10.99 per month" part of the 'deal'?

What I don't want is to get upgraded to Ultimate AND somehow have to pay £10.99 per month.

It is simply ambiguous, to me at least, so has anyone applied this upgrade successfully ie paid £1 only.

Thanks!

:)