You may have invested in one or more investment bonds. These are technically life assurance bonds and are often called by other names such as Property Bond, Distribution Bond, With Profits Bond, Capital Investment Bond or without the word ‘bond’ appearing at all such as with Aviva’s Select Investment.
If you have one of these that was issued by a UK or offshore insurance company it is likely to be an investment bond. Why is that important? Simply because of the unusual tax treatment of investment bonds.
Unlike other investments they are not taxed under the capital gains tax regime but under the rules for income tax. This provides them with unique advantages and disadvantages over other investments.
Investment bonds are not so popular as an investment these days but many of them are still held by investors and if you are one of them it is important to know exactly what you have and whether you should be keeping it or reinvesting in a different type of investment.
For further information please follow one or more of the links below.