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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I now find I have had a bond dating back to 2006. I was

Resolved Question:

I now find I have had a bond dating back to 2006. I was receiving 417.00 per month ever since. I can't believe I've been such a fool. I've notified HMRC and they are sending me the forms. I'm not covered by Second Incomes Campaign and I will have 3 months to complete and return
Submitted: 10 months ago.
Category: Tax
Expert:  TonyTax replied 10 months ago.

Hi.

Are they bank bonds? Was tax deducted at source from the interest?

Customer: replied 10 months ago.
They were Norwich Union Bond no mention of deducting tax just that I'd get £416.67 a month.
Expert:  TonyTax replied 10 months ago.

It sounds like a single premium investment bond. Did you make a single investment? If so, how much was that and was it made in 2006?

Customer: replied 10 months ago.
it was a £100.000. There were lots of charges and some £6,900 payable immediately and further deductions every year
Expert:  TonyTax replied 10 months ago.

I have to go out for a while. I'll be back to deal with the bond question a bit later today.

Expert:  TonyTax replied 10 months ago.

Have you only ever taken out £417.00 per month

Customer: replied 10 months ago.
from 2006 I have had that each month paid into my bank.
Expert:  TonyTax replied 10 months ago.

If the bond is a UK one, you have been taking out 5% of the original investment per policy year. With this type of bind, you are allowed to take out 5% per annum tax free as you are treated as taking back the capital, not the capital growth. If you exceeded £5,000 per annum, you would have been issued with a chargeable event certificate by Norwich Union for that policy year. Assuming the bond is a UK bond, not an offshore one, that you are a basic rate taxpayer and have been since 2006 and you have only ever drawn £417.00 per month, you don't need to declare the withdrawals in your tax returns. Call Norwich Union and ask them to confirm that:

1 the bond is a UK bond, not an offshore one,

2 you are a basic rate taxpayer and have been since 2006 and

3 you have only ever drawn £417.00 per month since it started and that there have been no chargeable events.

I hope this helps but let me know if you have any further questions.

Customer: replied 10 months ago.
Thanks Tony sounds good to me. Will do as you suggest.
Customer: replied 10 months ago.
I've spoken to them it is a UK Bond and I don't have to pay tax as you said . Thanks Tony one less thing to worry about
Expert:  TonyTax replied 10 months ago.

Thanks.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15886
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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