Investment bond - how does it affect my tax situation?

Lord_Kitchener

Hi there,

First-time poster here, and numbers aren't my strongest suit. Please be gentle.

I am fortunate enough to have just received a cheque from an investment bond that has been surrendered by a family member.

I understand that this represents a 'chargeable gain', but I'm not sure how I deal with it from a tax perspective (I am a higher rate tax payer).

I read on another thread that basic rate tax will already have been applied, so am I liable for the further 20% by way of a tax return?

Thanks for any observations.

coastline

have a look at tax benefits and top slicing in this link...I'm guessing this is the type of bond.

http://www.brannanphillips.co.uk/guides/unit_linked_bonds/2index.htm

dunstonh

The owner of the policy suffers the tax. Were you the owner? Was it in trust?

Lord_Kitchener

Thank you both.

I wasn't the owner, and it was in trust. It has now been surrendered and I'm not sure what to do with the cheque...

gozomark

Lord_Kitchener wrote: »

Thank you both.

I wasn't the owner, and it was in trust. .

were you a named beneficiary of the bond ?

Lord_Kitchener

Yes, I believe so.

gozomark

its important to find out

Lord_Kitchener

Thank you. I've just checked and I am a named beneficiary.

Lord_Kitchener

Thanks for your responses. Does the fact that I'm a named beneficiary change things?

gozomark

Yes - if you aren't a named beneficiary then its merely someone giving you money, and someone elses tax liability

xylophone

http://www.pruadviser.co.uk/content/support/technical_centre/taxation_uk_investment_bonds/
Attributing the gain to a chargeable person The information here on CGT and Income Tax on policies in trust might be relevant?