Capital redemption policies

An Inland Revenue press release published on the 10 February changed the way that capital redemption bonds are taxed in the hands of UK resident companies. Capital redemption bonds (CRBs) differ from normal investment bonds in that they are not contracts of life assurance. Insurers usually issue the contracts for a fixed term, say 80 years, promising to pay a fixed sum on maturity equal to the higher of the value of the underlying assets, or 2.5 times the premium. Traditionally, the tax position of a CRB in the hands of a UK resident is the same as that applying to life assurance bo...