Typical questions asked about our Income Bond
Can I take income from the Bond?
Yes, you can withdraw up to 5% of the initial capital investment into the Bond each year, without any immediate tax liability, until the total you have withdrawn equals the initial investment amount. Once you have made withdrawals equal to your initial investment this allowance stops.
How is Income paid from the Bond?
You can choose the amount you would like as annual income of between 2% and 5% and this will be paid directly to your bank account either monthly, quarterly, half yearly or annually on or around the 20th of the month.
Taking a lower amount as income will allow greater opportunity for capital growth over the years but obviously each individualís circumstance will need to be taken into account.
Can I make any withdrawals before the end of 5 years?
Yes, should you need to withdraw some of your capital at a future date we can issue your Bond in segments, with a minimum of £5,000 per segment, to enable you to take out part of your investment subject to a level of £10,000 remaining in the Bond after any withdrawal. However, depending upon the length of time that your money has been invested, a surrender penalty may be incurred. Any withdrawals of this nature will also affect the level of income provided from the Bond.
Can I invest in joint names?
Yes, the investment can be held in joint names if you wish
Are there any tax implications?
The tax treatment of your Bond will depend upon personal circumstances. However, under current legislation which may change, basic-rate taxpayers will normally have no Income or Capital Gains tax to pay on the proceeds as the Society pays tax on the fund.
Basic rate taxpayers will not normally be liable to any additional tax on the policy proceeds. However, higher rate taxpayers, or those close to paying higher rate may be liable to the difference between the basic and higher rates on the excess of the policy proceeds over the amount invested. Those in receipt of child tax credits or age related personal allowances may lose part or all of those tax advantages when the proceeds are taken. Please ask for further details if necessary. Tax rules may change in the future.
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