Neil Macleod explains why when advisers are dealing with investment bond gains 20% isn't necessarily 20%
Investment bond gains are taxed as ‘savings income' but this doesn't mean that the basic rate of tax applicable to savings income (20%) is what basic rate taxpayers will lose on the overall return. There are various reasons why the effective tax rate will be lower and in some cases that rate could even be as low as 0%. In order to work out how the returns will be impacted by tax you need to consider both the internal taxation of the investment as well as the tax payable by the investor. Internal taxation The internal taxation of offshore bonds is relatively straightforward. Offsh...
To continue reading this article...
Join Professional Adviser
- 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.