CGT on Investment Bond

feralkitten

In 2002 I took out a "unitised investment plan" through Pearl which allows for whole or partial encashment at any time. The terms say that this may result in a chargeable gain. Am I right in thinking this is CGT and not income tax? I wouldn't be liable for CGT as its within the annual allowance, but don't know if the gain is taken into account for the purposes of calculating my personal tax allowance (being over 65). Does the Revenue add this to pension income in their calculations? Can anyone help please?

morgani

Apologies as earlier response was incorrect. The gains fall under IT but the taxing of bonds can be quite complex particularly on part-withdrawals.

You can withdraw 5% of your initial investment tax free each year which can be carried forward to future years if no withdrawal is made in the year.

BoGoF

A chargeable event gain falls under Income tax NOT Capital Gains tax and there is no annual exemption.

If you do generate a chargeable event then unless you are liable to higher rate tax, or the gain takes you into higher rate tax then there is no further tax to pay on the gain. However the gain is income for age allowance purposes and may mean you lose some, or all, of any age allowances.