investments

barak

carlbhoy wrote: »

.....I also have £150000 in the bank from the sale of my house, and once again he has said to invest in a ProFund Cautious Fund investment bond, which is expected to pay the same returns as before, he also states I can withdraw up to 5% each year without having to pay any tax.....

I've never understood the taxation of these 'bonds'. There appears to be some lack of flexibility. I hope carlbhoy and others understand the following:

"How is my investment taxed
Prudential pays tax on income and capital gains accrued within its funds. HM Revenue
& Customs (HMRC) regards payment of this tax as equivalent to you having paid
Capital Gains Tax and Basic Rate Income Tax, so you have no personal liability to Capital
Gains Tax or Basic Rate Income Tax on the proceeds from your Bond. However, the tax
paid by Prudential is not reclaimable.
A liability to Income Tax above the basic rate may arise if a chargeable event occurs
and a chargeable event gain or “profit”, arises.
> in the event of your death, or
> on certain assignments (transfer of legal ownership of all or part of your Bond)
for money or money's worth. This can include an assignment as part of a divorce
settlement. If this were to ever apply, please refer to a Solicitor for further
information, or
> on maturity of your Bond (this does not apply to Bonds written as whole of life
policies which remain in force until full and final cashing in or the life/lives assured,
dies), or
> on full and final cashing in of your Bond or policy within the Bond; or
> if you withdraw more than 5% (please see below for information for Corporate
Investors) per policy year of the amount that you have paid into your Bond. This
5% withdrawal allowance is cumulative, and any unused part can be carried
forward to future years, subject to the total cumulative 5% allowance amount not
exceeding 100% of the amount you have paid into your Bond.
Certain Personal allowances and Tax credits may also be reduced if a chargeable event
occurs and a chargeable event gain or "profit", arises.
For more information on Chargeable Events please speak to your Financial Adviser."

Come in dunstonh!