Investment Bond CGT Question

dunstonh

The fact it mentions years suggests that it is an investment bond as the top slicing calculation would need to know the number of years. Investment bonds cover basic rate tax at source (it says lower in your documentation but that means basic). There is the top slicing relief calculation to apply.

The gain is 29369. Its joint so, you halve the gain. So thats 14684. You divide that gain by the number of years held which gives you £1835. Add that £1835 to your income and if you are still a basic rate taxpayer after that then you have no further tax to pay. If it takes you into higher rate tax then you have a further liability and have to do a further calculation.

Unit trusts, OEICS and Investment trusts have a liability to capital gains tax on growth and income tax on dividends and interest. Investment bonds have no liability to CGT but the gain is treated as income but has top slicing relief. So, it is important to make sure you get the investment tax wrapper right.

The certificate should be called something like chargeable gain certificate or make reference to a chargeable gain if its an investment bond.

space_trooper

dunstonh... thank you very much for pointing this out as otherwise I would not have known to include in my return. I'm obviously very pleased to find out I have no further tax liability as well.

Cheers