Family Wealth Planning Course  

Guide to bonds and family wealth

  • Describe how investment bonds work
  • Identify the tax liabilities
  • Explain how bonds work in trusts
Guide to bonds and family wealth planning
How bonds' structure and tax advantages can help clients pass on wealth

Investment bonds lost popularity with some financial advisers after the Retail Distribution Review as they could no longer receive commission on them. 

But for some advisers they have remained a popular way to conduct financial planning, especially when trying to pass wealth down the generations.

They are also tax efficient – there is no tax deducted on dividends from equities held in the wrappers and capital gains are taxed at 20 per cent, making bonds very appealing for those who plan to invest for the long term.

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Both onshore and offshore bonds allow investors to withdraw up to 5 per cent of contributions each year without being liable for tax, and both types can generate income. They can also be held in trust.

This guide looks at the various dimensions of bonds and how they can be used in family wealth planning. It is worth 60 minutes of CPD.


Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Which of the following is NOT an event when the bond policy ends?

  2. Offshore bonds are not taxed, apart from small withholding tax, true or false?

  3. Chargeable event means the bond is taxed on both an income and capital gains basis, true or false?

  4. Which of the following is NOT a bond chargeable event?

  5. Why is the change to CGT and the dividend allowance especially difficult for trusts?

  6. A higher rate taxpayer can assign the bond to their spouse as a gift, without triggering a tax charge, true or false?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe how investment bonds work
  • Identify the tax liabilities
  • Explain how bonds work in trusts

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