Investment Bonds ‘Onshore’

These are Investments offered by insurance companies, technically they are whole of life insurance policies.

Onshore Investment bonds have a particular tax profile that is advantageous to some investors. Also, Local Authorities do not include the value of onshore investment bonds when considering an individual’s assets for the purpose of entitlement to financial support for residential long term care.

The FSA Money madeclear™ website gives a useful overview of Investment bonds.

Like all financial products, Onshore investment bonds have specific features that offer potential advantages to investors, but an attractive feature is only a benefit if it is relevant!

The key points of potential interest:

• Wide fund choice
• Simple administration
• Switches between funds without charge or tax implications
• Withdrawals of up to 5% p.a. for 20 years without immediate
  tax liability
• Exempt from Local Authority assessment for care funding support
• Tax profile is ideal to use within trust arrangements

However

• Tax paid within the investment cannot be reclaimed by non taxpayers
• Charges may be higher than other collective investments