Investment Bonds
The Investment Bond offers a range of funds to invest into, for example the Distribution Fund, Deferred Distribution Fund and With Profit Fund. The underlying spread of assets will range from equities through fixed interest securities, property and cash and will vary from fund to fund.
Many people invest into these Bonds because of the very flexible income arrangements that are not available with other types of investment. Investors can determine the level of income required each year and have that income paid monthly, quarterly, half yearly or annually. 5% of the fund value can be withdrawn per annum without immediate tax implications. Tax is deferrend for a period of 20 years or until the Bond is encashed. On encashment the proceeds from the Bond are deemed to be tax-paid to basic rate taxpayers. However, higher rate taxpayers may have additional tax implications.