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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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We wish to partially surrender an investment bond. Will we

Customer Question

We wish to partially surrender an investment bond. Will we have to pay tax on it?
JA: Have you talked to a tax professional about this?
Customer: No
JA: Anything else you want the Accountant to know before I connect you?
Customer: No
Submitted: 6 days ago.
Category: Tax
Expert:  bigduckontax replied 6 days ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

This is a complex area and you may be liable to Capital Gains Tax (CGT) on surrender. However, you do have a non cumulative Annual Exempt Amount (AEA), currently 12K, to offset gains.

Have a look here for the complexities in this exercise:

https://www.canadalife.co.uk/adviser/ican-academy/briefing-notes/tax-investments/taking-money-from-a-bond-individual-policy-surrender-or-partial-surrender

In basic terms 5% of accumukated premuims cann be taken without penalty. If a gain has been made then this is taxable.