{"id":759,"date":"2023-07-19T12:05:12","date_gmt":"2023-07-19T11:05:12","guid":{"rendered":"http:\/\/www.a1-financial.com\/blog\/?p=759"},"modified":"2023-07-17T13:06:19","modified_gmt":"2023-07-17T12:06:19","slug":"are-we-entering-an-investment-bond-renaissance","status":"publish","type":"post","link":"https:\/\/www.a1-financial.com\/blog\/are-we-entering-an-investment-bond-renaissance\/","title":{"rendered":"Are we entering an investment bond renaissance?"},"content":{"rendered":"<h2 class=\"gmail-p4\"><b>Exploring why they are an attractive option to mass-affluent investors<\/b><\/h2>\n<p class=\"gmail-p4\">Onshore investment bonds typically carry a lower risk and contribute significantly to a well-rounded portfolio. Historically, numerous investors have opted for a 60% equities and 40% bonds split in their portfolios, as these two assets often (keep in mind, not always) exhibit contrasting performances under varying economic circumstances \u2013 a beneficial attribute during market volatility.<\/p>\n<p><!--more--><\/p>\n<p class=\"gmail-p3\">Following the Capital Gains Tax (CGT) changes announced in last year&#8217;s November Autumn Statement, many investors are likely considering investment bonds a more attractive option. The Chancellor&#8217;s decision to reduce the CGT allowance to \u00a36,000 this year and to \u00a33,000 in April 2024 means investment bonds are more attractive to mass-affluent investors who previously held money in OEICs and unit trusts.<\/p>\n<p class=\"gmail-p3\"><b>Investment bonds offer several benefits:<\/b><\/p>\n<ul class=\"gmail-ul1\">\n<li class=\"gmail-li3\">Onshore bonds are not liable to CGT. Onshore bonds are treated as having already paid 20% tax on any gains when calculating a chargeable gain. In reality, the tax deducted is likely to be less than this.<\/li>\n<\/ul>\n<ul class=\"gmail-ul1\">\n<li class=\"gmail-li3\">They can be ideal for Inheritance Tax (IHT) planning and are exempt from IHT after seven years if held in a trust.<\/li>\n<\/ul>\n<ul class=\"gmail-ul1\">\n<li class=\"gmail-li3\">Investors can withdraw up to 5% of their initial investment annually without triggering a chargeable event or any immediate tax liability.<\/li>\n<\/ul>\n<ul class=\"gmail-ul1\">\n<li class=\"gmail-li3\">Top slicing relief is available to reduce tax liability, which can eliminate or significantly reduce any tax liability when a chargeable event is incurred \u2013 helpful if investors are in the accumulation phase and are preparing for retirement (maybe a higher rate taxpayer while owning the bond, but a basic rate taxpayer when encashing).<span class=\"gmail-Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<ul class=\"gmail-ul1\">\n<li class=\"gmail-li3\">There are options to assign a bond (for example, between husband and wife as a genuine gift). For tax purposes, the assignment will generally be treated as if the new owner had always owned it \u2013 if one is a basic rate taxpayer, they could have no tax to pay on encashment.<\/li>\n<\/ul>\n<h2 class=\"gmail-p3\"><b>Have you exhausted your other tax allowances?<\/b><\/h2>\n<p class=\"gmail-p3\">Changes to CGT and the tax-free dividend allowances are also likely to appeal to investors looking to reduce IHT liabilities and those who have used their Individual Savings Account (ISA) allowances or received a large windfall payment.<\/p>\n<h2 class=\"gmail-p3\"><b>Want to learn more about investment bonds?<\/b><\/h2>\n<p class=\"gmail-p3\">If you would like to arrange a no-obligation consultation to discover your investment options, please get in touch with us to discuss your distinct needs. We&#8217;re looking forward to hearing from you.<\/p>\n<p class=\"gmail-p3\"><b>THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.<\/b><\/p>\n<p class=\"gmail-p3\"><b>THE VALUE OF YOUR INVESTMENTS CAN GO DOWN AS WELL AS UP AND YOU MAY GET BACK LESS THAN YOU INVESTED.<\/b><\/p>\n<p class=\"gmail-p3\"><b>THE TAX TREATMENT IS DEPENDENT ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Exploring why they are an attractive option to mass-affluent investors Onshore investment bonds typically carry a lower risk and contribute significantly to a well-rounded portfolio. Historically, numerous investors have opted for a 60% equities and 40% bonds split in their portfolios, as these two assets often (keep in mind, not always) exhibit contrasting performances under<a class=\"excerpt-read-more\" href=\"https:\/\/www.a1-financial.com\/blog\/are-we-entering-an-investment-bond-renaissance\/\" title=\"ReadAre we entering an investment bond renaissance?\">&#8230; Read more &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":760,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"_links":{"self":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/759"}],"collection":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/comments?post=759"}],"version-history":[{"count":1,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/759\/revisions"}],"predecessor-version":[{"id":761,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/759\/revisions\/761"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/media\/760"}],"wp:attachment":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/media?parent=759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/categories?post=759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/tags?post=759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}