Taxation of withdrawals from Aegon Investment bond?

eranou

dunroving wrote: »

What about onshore (it's an onshore bond)?

You're going to need to find out the exact start date. if it was first purchased from Skandia then cashed in before being reinvested with Aegon then the 5% allowance will start from the date it was placed with Aegon so the rolled-over 5% allowance would currently be approx £21700 (assuming no previous withdrawals have been made)


If it has been in place for over 20 years then the full £62k can be taken with no chargeable gain. (again assuming no previous withdrawals have been made)

Aegis

dunroving wrote: »

What about onshore (it's an onshore bond)?

Much the same position really. The tax-deferred withdrawals are linked to the policy, not the owner.

dunroving

eranou wrote: »

You're going to need to find out the exact start date. if it was first purchased from Skandia then cashed in before being reinvested with Aegon then the 5% allowance will start from the date it was placed with Aegon so the rolled-over 5% allowance would currently be approx £21700 (assuming no previous withdrawals have been made)


If it has been in place for over 20 years then the full £62k can be taken with no chargeable gain. (again assuming no previous withdrawals have been made)

Aegis wrote: »

Much the same position really. The tax-deferred withdrawals are linked to the policy, not the owner.

Thanks, both, I'll look into it. I think she still has paperwork from 7 years ago so I can look into whether this was some sort of transfer, or a cash-in and re-investment.

I know the exact date the Aegon bond started and that a financial advisor told her to start the Aegon bond and "switch" from Skandia but I don't know why or how this was done. If it was a cash-in and re-investment it would be a shame if this means she will lose out on roll-over of the annual 5% from the period she was with Skandia.

It seems that based on her low income she will not be taxed on withdrawals anyway but it would be nice and simple if she was eligible to take out the lot tax-free based on length of the bond. I'll look into it further to see what the situation was.

eranou

If it was previously cashed in she wouldn't have lost out on the 5% withdrawals as this would have been factored into the calculation for the gain she would have had on full encashment with Skandia.

the way to look at it is the 5% is not really giving you anything extra it just allows the amount invested to be taken out without immediate tax implications over time but when it comes to fully surrendering then any previous withdrawals are taken into account when working out the amount gain at the time.

dunroving

eranou wrote: »

If it was previously cashed in she wouldn't have lost out on the 5% withdrawals as this would have been factored into the calculation for the gain she would have had on full encashment with Skandia.

the way to look at it is the 5% is not really giving you anything extra it just allows the amount invested to be taken out without immediate tax implications over time but when it comes to fully surrendering then any previous withdrawals are taken into account when working out the amount gain at the time.

Ah, OK, that makes sense. :beer: