Withdrawing life insurance bond

arsenepenguin

Hi
I am in the process of partially withdrawing 35 k from my Aviva bond.
I am faced with three choices.
1 cash in part of my policy
2 cash in part of my policy and proceed on the basis that will produce the lowest chargeable gain
3 cash in some of the segments in my policy.
Not sure which path to go down , could anybody help.
Yours
arsenepenguin

notbritishgas

arsenepenguin wrote: »

Hi
I am in the process of partially withdrawing 35 k from my Aviva bond.
I am faced with three choices.
1 cash in part of my policy
2 cash in part of my policy and proceed on the basis that will produce the lowest chargeable gain
3 cash in some of the segments in my policy.
Not sure which path to go down , could anybody help.
Yours
arsenepenguin

I cannot help you but am very interested in this.
Yesterday I approached Zurich to do exactly the same with my bond with the same choices.
I am currently struggling to work out the tax liability if any.
The bond is 23 years old and has had no withdrawals so i think I have all those 5% to add up.

dunstonh

Which method suits your tax position the best?

Are you looking to create a small or larger chargeable gain? Dont assume smaller is better. If it is an onshore bond (and not offshore) and you have sufficient basic rate band or lower (inc personal savings allowance) then it can be better to take the higher gain.


Option 2 seems to be the same as option 1. So, its really 1 or 3. The odds are that option 3 is likely to be better but it really depends on your tax position (now and future) and the total amount invested.