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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 7412
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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If I draw an investment bond out in order to reinvest it

Customer Question

If I draw an investment bond out in order to reinvest it more profitably . Do i need to pay tax on the money that is moved.
JA: Have you talked to a tax professional about this?
Customer: Not really
JA: Anything else you want the Accountant to know before I connect you?
Customer: I would like to be able to give some of the money to my grandson on his marriage which will be next october
Submitted: 20 days ago.
Category: Tax
Expert:  taxadvisor.uk replied 20 days ago.

Hello and welcome to JustAnswer. I am here to help you.

Pleae advise how long you have invested in this bond?
Many thanks

Customer: replied 20 days ago.
The start date waS 7TH NOVEMBER 1996
Expert:  taxadvisor.uk replied 20 days ago.

Thank you for your reply.

All gains and income earned within an investment bond are taxed at 20% and paid directly out of the investment bond.

If you are a basic rate taxpayer then there is no further tax to be paid on the movement (growth) when you cash in.

All capital gains are treated as income at this point. Although tax at 20% has already been deducted, you might have an additional income tax bill if your gains push your income over the higher or additional rate tax threshold in the year they mature.

More information on investment bonds and tax implications can be found here

https://www.moneyadviceservice.org.uk/en/articles/investment-bonds#tax-on-investment-bonds

My aim is to give you a professional service. I hope this is helpful and answers your question.

If you need more assistance, please use the reply box below and let me know. It has been my pleasure to assist you with your question.

Expert:  taxadvisor.uk replied 19 days ago.

Hi there

Just checking to see if you need me to clarify anything or if you have any additional questions - I am happy to help!

Many thanks