original investment was £12,000 the bond is offshore in Dublin
I may need to cash in the bond to help my daughter. it was taken out in
Nov. 2000 sorry for delay but lost the page
Thanks.Have you made any withdrawals since you took out the bond?
no withdrawals only the allotted interest tax free I think it is 5%
I have replied . no withdrawals but had interest payments at 5% which should be tax free.
why is your computer time showing 09.55 where are you?
I'm back.You should look at HS320 and HS321 which deal with the tax implications of UK (onshore) bonds and offshore bonds respectively.In order to work out the gain you need to take the surrender proceeds and add back the sum of all the 5% withdrawals and deduct the original investment of £12,000 and any previous chargeable event gains of which you say there were none as you have never taken more than 5% out of the bond in any one policy year. So, the gain will be £5,274 (£8,874 + £8,400 - £12,000). See page 18 of HS321.You may be entitled to top-slicing relief which aims to mitigate the effect of a higher rate tax charge on an individual who is not normally a higher rate taxpayer. Assuming the bond is an offshore bond, there will be no basic rate tax credit as there is with UK bonds so you will have a minimum of 20% tax to pay on the £5,274 gain , ie £1,054.80.If you divide the £5,274 gain by the number of completed policy years (14), you get a top-slice of £376. If when you add the top-slice to your income for 2014/15 assuming you surrender it in the current tax year, then that part of the top-slice which takes your income over £41,865 will be taxable at 40%. You would then multiply the tax on the part of the gain taxable at 40% by 14 and add the result to the amount of the gain taxable at 20%.If you are a 40% taxpayer regardless of the gain, you will pay tax at 40% on all of the gain if your income is no more than £150,000 or at 45% if your income is over £150,000.I hope this helps but let me know if you have any further questions.
thank you for your work but it is too much for me to take in. I shall get the forms you mentioned