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Tax

What is making onshore insurance bonds more attractive?

Explain the benefits that onshore bonds offer
Explain the difference between onshore and offshore bonds
Explain the benefits that offshore bonds offer

CPD

Approx.30min

By Les Cameron

Whatever happens, as always, the key to efficient tax planning will be getting the correct balance of GIAs and bonds to suit the client’s objectives.

Les Cameron is head of technical at M&G Wealth

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CPD

Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

What is an example of a chargeable event?
When a policy has matured 30 years and the life assured dies
When a policy changes provider and loses validity
When a policy loses validity and the cover is passed on to the next of kin
When a policy is surrendered or the last life assured dies
True or false? Top slicing relief is designed to give relief from having a gain built up over several years that is all taxed in the same tax year.
True
False
What is the tax-deferred allowance?
It is where bond holders are allowed to take 10 per cent of their original capital back each year without it causing a tax event
It is where bond holders are allowed to take 5 per cent of their original capital back each year without it causing a tax event
It is where the investment loses its CGT exemption after hitting maturity
It is where the investment loses its CGT exemption after 30 years
Which of the following is the ODD one out when it comes to some of the benefits of bonds?
With a bond you can make a gift to someone without it giving rise to a tax event, whereas with a GIA gifting some or all of your portfolio will usually trigger a CGT event
If the gift is to be made into trust, bonds can be easier to manage as there is no need to
Advisers do not need to be concerned about an individual’s tax position when managing portfolios, because the buying and selling happens in the corporation tax world with no impact on the individual
Onshore bonds are much more beneficial to younger than older people because of the flexibility they offer
What is the difference between an onshore and offshore bond?
With an offshore bond, the money grows in the bond tax free
There is no minimum age to set up an offshore bond, whereas with an onshore bond, there is
More people know about onshore bonds than they do about offshore bonds
All of the above
Why is it that using an offshore bond can be as tax efficient as an Isa without the £20,000 investment limit?
Because bond gains are classed as investment income
Because bond gains are classed as savings income
Because bond gains are classed as savings and investment income
Because bond gains are not paid directly to the bond holder

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You should now know…

Explain the benefits that onshore bonds offer
Explain the difference between onshore and offshore bonds
Explain the benefits that offshore bonds offer

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What is making onshore insurance bonds more attractive?

What is an example of a chargeable event?

True or false? Top slicing relief is designed to give relief from having a gain built up over several years that is all taxed in the same tax year.

What is the tax-deferred allowance?

Which of the following is the ODD one out when it comes to some of the benefits of bonds?

What is the difference between an onshore and offshore bond?

Why is it that using an offshore bond can be as tax efficient as an Isa without the £20,000 investment limit?

Nearly There…

You should now know…

I completed this CPD in

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Any comments about this article or FTAdviser's CPD in general?

Banked!

Already Banked!

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