Investment redemption questions, capital gains etc

ajhands

Hello,
I wonder if anyone can be of help to me; I am going to pull out my investment bonds, one with Clerical Medical, one with Abbey, one with Christows because of what I think will be a rather bumpy ride on the stock markets in the coming year.

They were all originally funded with inheritance money so am I right in thinking that the original sum should be completely free of any tax when I cash it in?

As for the profits on the funds, what are the rules here? They have made a few thousand in total.
Is it possible to cash out the original sum plus a portion of the profit over a period of time to avoid any taxes.
I am a student and a non-taxpayer as I do not earn enough to pay tax.

Thanks in advance for any help!

isofa

You have a capital gains allowance of £9200 this year, so as long as they haven't made more than £9200 (additional to the original invested sum), you have nothing to pay.

For example, say you invest £10,000 and if when you sell they are worth £19,200 or less, there is no tax to pay.

If they have exceeded the CG allowance, it will be worth selling one bond this tax year, and one next, as you get a new allowance each tax year.

dipsomaniac

if an investment bond there is no capital gains liability. any gains are added to income and taxed as income - we would need more information to calculate any tax liability - date invested, amount invested, current value, you income etc.

why did you invest in investment bonds originally? has your objectives changed? these are long term investments and not an investment you cash in because of short term market conditions.

EdInvestor

A student non-taxpayer is flogged no less than 3 investment bonds.They will be subject to exit penalties and he will have paid 20% (unreclaimable) tax on his gains.What is the benefit?What is the cost?

I see the best advisors are now complaining about "yesterday's product":

Fee-based advisers would be willing to pay life offices for a higher standard of tax and trust advice to avoid the implicit pressure to buy insurers’ bonds.



Advisers at the first New Model Adviser® Inheritance Tax Planning (IHT) Forum in London expressed concern that by making their technical advice free providers risked devaluing their service and muddying their relationship with intermediaries.


Sheriar Bradbury, managing director of Bradbury Hamilton in London, said: ‘I think it would be a good idea to pay for the services. It is better that we can quantify what the cost is and the benefit to you.’
Threesixty partner David Ingram said: ‘There is more appetite for advisers to pay fees and they are used to charging fees to their clients fees.’
Robert Goldschmidt, partner at Cumberland Place Financial Management, believed providers should offer services rather than ‘pushing yesterday’s product’.

From www.citywire.co.uk

dipsomaniac

a student, non tax payer now but may not have been when policies commenced

ajhands

Thank you all for your replies.
They haven't made more than £9200 between them so no taxes to pay, good!

I would have thought that there will be no exit penalties, as I've had the investments for 6 years...I hope!

Thanks again

dunstonh

Are there other funds available? Many of these are offer a range of funds with no stockmarket exposure.

Why do you think the market is rocky and you should pull out now when we had a similar drop last year? You didnt pull out then. What makes this one different?

ajhands

dunstonh wrote: »

Are there other funds available? Many of these are offer a range of funds with no stockmarket exposure.

Why do you think the market is rocky and you should pull out now when we had a similar drop last year? You didnt pull out then. What makes this one different?

Hello,
To be honest I've been thinking I wanted to pull them out for a month or so (should have acted sooner). What makes it different is that I would now like to do other things with the money and the short term prospects of the stock-related funds are not too rosy.