With profit bond

Bobbies_Dad

Hi, my wife and i have a joint with profits bond that has built up a nice final bonus. We need to cash it in and wonder wether there will be any tax to pay when we cash it in
Thanks for any info

xylophone

Do you have an explanatory booklet with your paperwork?

Which bond is it? Who is the provider?

Linton

Assuming this is a standard UK investment bond....
Possibly some higher rate income tax on the profit. Standard rate tax will already have been paid but if you are a higher rate tax payer, or the total profit accumulated so far takes you into the higher rate band you will have to pay the 20% difference. It's complicated so see here for the details.

dunstonh

You take the value, include any past withdrawals (not part surrenders). Deduct the original investment amount and that gives you the gain. You halve that (as its joint). Then divide by the number of whole years held (to get top slicing relief. Then add that figure to both of your incomes. If you still remain basic rate taxpayers or lower then there is no further tax to pay. If it brings you into higher rate, you lose top slicing relief and some additional tax will be required.

Bobbies_Dad

Had the calculator out and it doesnt look like we will have to pay any tax.
Thank you all for your information