📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

advice please-investment bond & tax

Hi folks, I have an investment bond that Im cashing in as we are skint! It has a 6 month derferment on it for one bit of the bond, property allocation. Can anyone help me get my head around what tax I might have to pay in the following circumstances..
A- cash in the bond completely in 6 month time
B-cash in the other bits now and wait for 6 months for the rest.
Ive been told the tax implications are different for the two options, Im not a higher rate tax payer and the bond has grown by only about £1500 in 5 years. Im intending on re investing the amount straight away, will I have to pay tax on it and if so anyone know about how they calculate how much?
The total is approx £15k with £3k deferred for 6 months.
Thanks you!!
:confused:

Comments

  • dunstonh
    dunstonh Posts: 119,886 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Basic rate tax is considered paid already. Only if the gain takes you into higher rate tax will you have a liability for further tax. There is also a relief to reduce that as well potentially called top slicing relief.

    Take the gain, divide it by the number of complete years held and then add that slice to your income. If it doesnt take you into higher rate then you have no further tax to pay.
    Im intending on re investing the amount straight away
    Why not leave it where it is then? Most bonds have wide fund choices and the charges often improve after the 5th anniversary. Seems pointless cashing in one tax wrapper to put it into another unless there are good tax reasons for doing so. Although to be honest, what the heck is £15k doing in an investment bond!?!
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.4K Banking & Borrowing
  • 253.3K Reduce Debt & Boost Income
  • 453.8K Spending & Discounts
  • 244.4K Work, Benefits & Business
  • 599.7K Mortgages, Homes & Bills
  • 177.2K Life & Family
  • 258K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.