Insurance Bonds after 20 years?

dougg

I have bonds with a couple of insurers and have been taking 5% p.a. from them. I'm a standard rate taxpayer.

It won't be that long before they hit 20 years old and I seem to recall
that is a significant point

Can anyone point me to advice on what I should do when they do reach 20.
EG
Stop the income?
Carry on (but does that mean I need to do anything tax-wise)?

Newly_retired

Have you kept the original paperwork?
Did you use a Financial Adviser when you took them out?
If not, ring the organisation concerned to ask about terms and conditions for closing the bond.
I would have thought you would have had a statement every year showing the effect of withdrawals, charges etc, so you should know how much they are worth. If they have made money they may be worth keeping longer?
There is no easy answer from us.

eranou

dougg wrote: »

I have bonds with a couple of insurers and have been taking 5% p.a. from them. I'm a standard rate taxpayer.

It won't be that long before they hit 20 years old and I seem to recall
that is a significant point

Can anyone point me to advice on what I should do when they do reach 20.
EG
Stop the income?
Carry on (but does that mean I need to do anything tax-wise)?

Bonds allow you to withdraw up to 5% P.A of the original investment for 20 years without incurring a chargeable gain,
If you havent taken the 5% one year it rolls over to the next

If you have taken full 5% for more than 20 years you will start incurring chargeable gains assuming your taking these withdrawls on a regular basis i.e automaticly paid then you should be sent a chargeable gain certificate each year on the aniversary of when the policy started you need to add the amount of chargeable gain to HMRC to your income for that year,

The certificates should also show if the basic rate of tax is treated as paid in that case you would only pay tax if you are a higher rate tax payer or the amount of chargeable gain takes you into the higher rate bracket.