Permanent Information
Chargeable gains usually occur after a chargeable event. Here are some examples:
●
Death that results in a payment under the bond, that is the death of the
sole life insured or both lives insured under a last survivor bond.
The chargeable gain is calculated as the surrender value of the policies immediately
before death, plus any previous withdrawals, less the amount you originally paid
and any previous chargeable gains under the policies.
●
Full surrender of any one or more individual policies.
The chargeable gain is calculated as the surrender value of the policies, plus
any previous withdrawals, less the amount you originally paid and any previous
chargeable gains under the policies.
●
Partial surrender of the individual policies.
The chargeable gain is calculated as the excess of the amount withdrawn over
the available 5% allowance described above. If the withdrawal is within the 5%
allowance, there is no chargeable event and no chargeable gain. If the withdrawal
is more than the 5% allowance, then the gain is the amount of the excess. You
must be careful here, as this can result in a gain for income tax purposes even
when the bond is showing an actual investment loss. This 5% allowance is not
completely tax free as the withdrawals will be included in the calculation of the
fnal gain when the policy comes to an end.
●
An assignment of any policy for consideration, for example, if you sell your
bond to someone else.
The gain on an assignment depends on the consideration (e.g. money or value)
you received.
