Flexible Option Bond?

dunstonh

I did view the SW FOB feedback, which is why I needed to discuss it with somone. Many forum comments related to purchases some years ago, and maybe the price is better now (the IFA did say the time is right now - don't delay).

The bond is a tax wrapper. A container for investments. You can have many of the same funds in most of the tax wrappers. However, this tax wrapper just isnt right for you.

I was not too impressed with the FOB return he showed me for some of his other (unnamed) clients - seemed much the same as available from standard savings accounts - but he stressed the investor returns were not subject to CGT (not sure if there were any provisos?) or income tax (for basic tax-payers).

The fund manager pays the capital gains tax within the fund. So, you are paying it indirectly and it hits the returns in a rising market (although it actually benefits in a falling market). With unit trusts, which is the next most efficient option after ISAs, you pay no capital gains tax at all unless you exceed gains of £9,600 a year. Not something you are going to have to worry about and to be honest if by some fluke you did then its still only 18% on the amount above the £9600.

The income tax position is the same on the unit trust and bond for basic rate taxpayers (in your case anyway as it is slightly different).