The firm’s latest guide to insurance bonds, which is available to download here, outlines the tax changes likely to be introduced tomorrow and in particular how, as a life policy, insurance bonds will differ in their taxation from mutual funds.
David Abbis, author of the guide and insight analyst for wealth management at Defaqto said: “Insurance bonds have suffered in the last two years mainly because of the change in Capital Gains Tax (CGT) in April 2008 which made investments in mutual funds more attractive.
“Changes to CGT which are likely to be announced in the Budget next week include an increase in the current rate and a reduction in the exemption threshold could prompt significant outflows from mutual funds into insurance bonds.”
The areas covered by Defaqto’s Insurance Bond Guide include:
- A market overview of onshore and offshore bonds
- The investment types available
- Charging structures and fees
- Policyholder protection
- The taxation of bonds
- Bonds without guarantees
- Trusts and their use in estate planning
- Likely future developments and platforms
