Investment Bonds

[gbalin]

Sorry if this is covered elsewhere, but i can't search for investment bond as the words are too common!
I have an investment bond [unit based investments linked to a peppercorn life insurance] from Prudential and am interested to know if it is worth taking the 5% annually [tax-deferred] or better to leave it in and let it compound?
Grateful for help or advice where to post this.
Cheers

[Alaric]

Sorry if this is covered elsewhere, but i can't search for investment bond as the words are too common!
I have an investment bond [unit based investments linked to a peppercorn life insurance] from Prudential and am interested to know if it is worth taking the 5% annually [tax-deferred] or better to leave it in and let it compound?
Cheers

The board "Does anybody Know?" is a possible starting point.

Whether you take the return of captial or not would depend on whether you need the income. With regard to taxation, taking the 5% might work for you if a higher rate taxpayer. Prudential will be liable to tax in the underlying fund, so there's no additional tax on basic rate players.

[tjh290633]

I have a feeling that you can withdraw the 5% for 20 years, effectively withdrawing your capital, but what is left after that is all counted as capital gain. My experience is over 30 years old, so DYOR.

TJH

[gbalin]

Thanks both. That sort of clarifies my thoughts - the capital gain will be worse [better?!] if left to compound, and the idea was to take income, so that is what I think I'll do. After a bit more digging.

[genou]

I have a feeling that you can withdraw the 5% for 20 years, effectively withdrawing your capital, but what is left after that is all counted as capital gain. My experience is over 30 years old, so DYOR.

TJH

Not a capital gain. A "chargeable event", and it will generate Income Tax, if it generates anything. This is the wonderful world of top-slicing ( if that term rings any bells ).

For the committed ( and this is a randomly picked exposition ) - https://www.mandg.com/wealth/adviser-se ... able-event