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Prudential initial charge bond
ps2659
Posts: 534 Forumite
Hello looking for some help in regard to a Prudential initial charge bond, I think it used to be a called a prudence with profits bond.
The bond is in joint names with me and my wife we started the bond in 1999 with a lump sum we are both 20% taxpayers my questions are as follows.
1 We are looking to take some income from the bond tax free if possible either lump sum or monthly/quartely payment.
2 We invested in this fund many years ago through a broker never heard from them since could we transfer to someone like co funds or HL and earn a trail payment kick back for ourselves.
Grateful for any help or suggestions.
The bond is in joint names with me and my wife we started the bond in 1999 with a lump sum we are both 20% taxpayers my questions are as follows.
1 We are looking to take some income from the bond tax free if possible either lump sum or monthly/quartely payment.
2 We invested in this fund many years ago through a broker never heard from them since could we transfer to someone like co funds or HL and earn a trail payment kick back for ourselves.
Grateful for any help or suggestions.
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Comments
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1 We are looking to take some income from the bond tax free if possible either lump sum or monthly/quartely payment.
It wont be tax free. it will be tax paid.2 We invested in this fund many years ago through a broker never heard from them since could we transfer to someone like co funds or HL and earn a trail payment kick back for ourselves.
It is a life assurance bond. There is not trail. You cant transfer it either. Kick backs no longer exist on Cofunds or HL. New business moved to explicit charging in April 2014.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.0 -
It wont be tax free. it will be tax paid.
Thanks for your answer can you tell me how the tax will be paid, will it be deducted on payment and does this income have to be declared on any self assessment.0 -
Thanks for your answer can you tell me how the tax will be paid, will it be deducted on payment and does this income have to be declared on any self assessment.
With an Investment Bond such as this, tax is already paid within the Bond. For basic rate taxpayers there will be no further liability for tax unless the chargeable event (this happens when you withdraw more than 5% of the initial amount invested) takes you into higher rate tax.
As to a regular income, you are allowed to take 5% of the initial investment each year without creating a chargeable event. There is no need to declare this income on SA.
Perhaps have a read through this?
http://www.pru.co.uk/pdf/INVS0002.pdf0
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