No surrender: How to help bondholders avoid an unwanted tax bill

NO SURRENDER

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John Makin, technical expert at AXA Wealth, explores the adviser's role in saving clients from unexpected tax bills when they come to surrender a bond.

Investment bonds are often described as simple products and, in many ways, they are. However, when a client wishes to surrender all or part of the investment, it does not always remain simple. Where the intention is to withdraw funds from the bond, whether this is best achieved by part surrender (across all segments) or by full segment surrender will depend upon the individual case concerned. Without doubt, getting it wrong can lead to a very high, unnecessary tax charge for the client. There have been a number of well documented cases over the last few years highlighting the problems...

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