What are Investment Bonds and Friendly Society Investment Bonds?
Investment Bonds are pooled investments and have underlying assets similar to managed funds. However, there are differences in the legal structure and the tax treatment of investment bonds.
Investment Bonds retain their earnings, pay tax on those earnings at 30% and then automatically reinvest the net earnings back into the bond. They therefore do not impact on personal taxation and need not be included in an investors tax return.
When held for a full 10 years, investors receive the value of the investment bond, tax paid, which means that no further tax is payable by the investor. However, that does not mean that the investment is locked away as the investment can be accessed at anytime during the 10 years. |
