Nearly three quarters (72%) of advisers have seen an increase in demand for holding ESG and sustainable investments in onshore bond structures, according to an HSBC Life (UK) report.
Almost a fifth (16%) reported a significant increase in demand.
The study found that on average, advisers estimate that just under half (45%) of their client base holds onshore bonds, with advisers writing an average of 45 onshore bonds cases a year.
HSBC Life (UK) said that a relatively low annual dividend allowance and the reduction in the capital gains tax (CGT) annual exemption, from £12,300 to £6,000 ($7,300, €7,000), was driving increased interest in onshore bonds as a tax-efficient investment.
Around half (49%) of the 200 advisers surveyed said that dividend allowances are having a positive impact on the sector and 47% highlighted the positive impact from the reduced CGT annual exemption. Almost half (48%) of advisers said onshore bonds are attractive to clients looking for tax efficiency and regular income.
Mark Lambert, head of onshore bond distribution at HSBC Life (UK), said: “Recent changes in tax treatment of investments is turning the spotlight on how onshore bonds can deliver tax-efficient investment growth and regular income in a changing taxation climate.”
