Investment Bond

Investment Bond - Bond Investment Factfile

Unit Linked Investment Bonds

Lump sum investments: Yes

Regular premiums allowed: No

Flexible payments allowed (stop/start/additional/increase/decrease): Yes

Investment Bond - Investment Risk Profiles Available:

No Risk funds available - but only in a highly specialised personalised bond
Low Risk funds available
Medium Risk funds available
Medium to high risk funds available
High risk funds available

Availability: Available as UK based Onshore Investment Bond and Offshore 'Tax Haven' Investment Bond

Changing funds and risk profile allowed: Yes

Moving to another company allowed: Yes

Life Insurance Included: Yes

Investment Bond Personal Tax Benefits:

No personal liability to taxes for basic rate tax payers and non tax payers
Onshore Bonds investment fund pays taxes before you receive returns
Offshore Bonds investment fund have limited or no taxes depending upon which territory
Offshore bonds, UK resident potentially taxable when surrendered or partially surrendered or 'income' drawn
Onshore and Offshore: Up to 5% per year can be withdrawn with a fully deferred and postponed tax liability for higher tax payers for up to 20 years
If the higher rate taxpayer subsequently becomes a basic rate tax payer or non tax payer in the future any deferred or postponed tax liability is potentially wiped out
Higher withdrawals over and above 5% per year can be taken with no liability to tax for basic rate tax payers and non tax payers (onshore bonds only)
At maturity, any gain is added to normal income to see if this takes you into the higher rate tax bracket and if so marginal taxes become due (onshore bonds only)
Withdrawals do not affect or reduce enhanced tax allowances for pensioners

Can be held inside Trust: Yes

Investment Bond Suitable For:

Adults
Business (offshore bonds only not UK Bonds)
Basic Rate Tax Payers
High Rate Taxpayers
Trusts

Insolvency Compensation Limits:

UK - Insurance Company Funds - 90% of total funds invested. No Limit.
Offshore - depends upon territory but many have similar provisions to UK

Brief Description: Investment Bond

Unit linked investment bonds are a home for your money that offer potentially greater returns than a bank or building society. An investment bond offers you a framework so that you can tailor it to your needs in respect of how much you want to invest, where you want to invest it and with the degree of risk that you are comfortable with. These investments allow you access to a wide range of funds in terms of different markets, different levels of risk and investing in different investments such as shares, property and cash. Some funds that are offered through investment bonds are not available as direct investments. Investment bonds can be suitable for all types of investors because they are so flexible. They can also be suitable for higher rate taxpayers because of the way some of the tax can be deferred until the investment is surrendered. Read the section on Investment Bond Taxation.