Time Investment bonds over 50k

flange82

Can any one help, does any one know if it is possible to close a investment bond over 50k early? was put in halifax investment bond and will mature in july this year but need to get to the money now. The bank say i cannot close this early due to customs and revenue, is this right?

dunstonh

does any one know if it is possible to close a investment bond over 50k early?

Normally yes.

The bank say i cannot close this early due to customs and revenue, is this right?

No its wrong.

Investment bonds are just a tax wrapper for investments. If you draw more than 5% p.a. then the tax deferred creates a chargeable gain. That gain is added to you income after top slicing relief and if it takes you into higher rate tax or you are already a higher rate taxpayer (or over 65 with income of £22,900 or more) then you will be liable for more tax. However, there are no tax rules that prevent you from making the withdrawal. The only rules that apply are product rules. As I recall, the Halifax investment bond is pretty conventional in that respect. Expensive with naff investments as you would expect but close to you typical investment bond terms.

That said, I don't recall the Halifax investment bonds being fixed term and having a maturity. I though they were open ended non-qualifying single premium whole of life assurance plans rather than single premium endowments. To be fixed term they would have to have a minimum term of 10 years. Does that sound like yours or are you perhaps mixing up the 5 year tie in for exit charges as being a fixed term?

BargainGalore

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flange82

thank you for that, no its definately fixed for 5 years, i was told originally i could close it after 6 months. I then got told i need a letter from HMRC to authorise it closing as they would lose the interest we would have to pay them. its in joint names with my mother and she is over 65 and has more than that you stated. I need this money urgently and the bank wont close it its so fustrating!

soulsaver

flange82 wrote: »

thank you for that, no its definately fixed for 5 years, i was told originally i could close it after 6 months. I then got told i need a letter from HMRC to authorise it closing as they would lose the interest we would have to pay them. its in joint names with my mother and she is over 65 and has more than that you stated. I need this money urgently and the bank wont close it its so fustrating!

Best of luck.

dunstonh

thank you for that, no its definately fixed for 5 years

An investment cannot be treated as qualifying unless it has a minimum term of 10 years. A 5 year investment bond cannot meet qualifying status under HMRC rules.

Are you sure its an investment bond?

You mention interest and bank. Banks do not issue investment bonds. They may retail them but investment bonds are classed as life assurance plans and therefore require an insurer to issue them. Halifax used Halifax Life but have been rebranded under Scottish Widows for some time now. So, your paperwork would mention Scottish Widows funds. Also, investment bonds do not pay interest. They contain investments which are subject to investment returns. The assets could include interest paying investments but the rate of return is reflected in the unit price and does not get classed as interest from a personal point of view.

Are you perhaps not referring to an investment bond but a fixed term deposit?

flange82

i think it must be a fixed term deposit, the bak told us we couldnt close it as they pay the gross interest and we pay tax to hmrc so its up to them to authorise it being closed. my mother has now gone into a home so getting the money out is urgent but halifax remain positive it cannot be closed early without hmrc approval.

opinions4u

What is the name of the account? Stepped income reserve? Fixed rate web saver? Something else?

jamesd

flange82 wrote: »

Can any one help, does any one know if it is possible to close a investment bond over 50k early? was put in halifax investment bond and will mature in july this year but need to get to the money now. The bank say i cannot close this early due to customs and revenue, is this right?

If you don't get any satisfaction on the closing, ask them if they are willing to advance a personal loan to be repaid by the maturing product, with them blocking direct repayment to you or her so they can be certain it'll be repaid.

jamesd

You might also write more about your mother's and your general financial situation, including her needs and resources, to see if we can come up with some alternative solutions that might be better than your current plans.