Tax planning: Revisiting the benefits of investment bonds

TAX PLANNING

clock • 3 min read

Rachael Griffin, head of technical marketing at Skandia, explores the many reasons why investment bonds remain powerful tax planning tools.

With the recent alignment of onshore and offshore bonds in relation to time apportionment relief, it is a timely opportunity to revisit the tax benefits of an investment bond. Tax-deferred withdrawals It is possible to take yearly withdrawals of 5% of the initial premium (and any additional premiums from the year in which they are added) without an immediate UK tax charge. Furthermore, the 5% is cumulative if not used: so, where no withdrawals are made in year one, 10% can be withdrawn in year two and so on. The allowance continues until all of the original investment has been withd...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax Planning

Majority of advisers think NI cut will not boost pensions savings

Majority of advisers think NI cut will not boost pensions savings

Only one in ten think people will put the extra cash into pensions savings

Isabel Baxter
clock 11 March 2024 • 1 min read
Partner Insight: Royal London's Fiona Hanrahan — 'Your top tax year end questions answered'

Partner Insight: Royal London's Fiona Hanrahan — 'Your top tax year end questions answered'

Fiona Hanrahan, Senior Intermediary Development and Technical Manager, Royal London
clock 08 February 2024 • 3 min read
Treasury collects £2bn in 12 weeks as IHT receipts continue to soar

Treasury collects £2bn in 12 weeks as IHT receipts continue to soar

Figure breaks down at £22m a day for the government’s coffers

Hope William-Smith
clock 21 July 2023 • 2 min read