Neil Jones: Three reasons to choose a UK investment bond

Credit for tax-free dividend income

clock • 8 min read

While there is an old saying regarding the 'investment tail of a tax dog', writes Neil Jones, the effective use of tax wrappers can help increase the net return to an investor

UK investment bonds have, for too long, been overshadowed by alternative tax wrappers and the perception that tax within a life fund is a disadvantage. This thinking can automatically discount an investment solution that can be very favourable - especially when you consider the tax changes over recent years. There are three great reasons why advisers should be recommending UK investment bonds to clients: they provide a credit for tax-free dividend income; the freezing of the indexation factor; and the benefits from the order of taxation when held with other investments in tax wrappers. ...

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

IHT shift: Why guaranteed income and property wealth will become strategic anchors for advisers

IHT shift: Why guaranteed income and property wealth will become strategic anchors for advisers

'Professional financial advice will be central'

Cecilia Furner
clock 06 November 2025 • 5 min read
Business relief: Advisers' IHT on pensions questions answered

Business relief: Advisers' IHT on pensions questions answered

AIM shares, gifting and the upcoming Autumn Budget

Professional Adviser
clock 06 November 2025 • 6 min read
Chancellor 'rips off the band aid' in pre-Budget speech

Chancellor 'rips off the band aid' in pre-Budget speech

Tax hikes predicted as chancellor prepares for ‘tough but necessary’ fiscal choices

Isabel Baxter
clock 04 November 2025 • 6 min read