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international premier portfolio technical guide

Taxation

Legal ownership

  • We’ll pay all benefits payable under the bond on surrender or death to the legal owners of the policy.

  • If you are the sole or last surviving bondholder, on your death legal ownership will pass to your legal personal representatives. However, if you hold the bond jointly with one or more persons and on your death there is a surviving bondholder, legal ownership will pass to that person.

  • If you’ve arranged the bond under trust, legal ownership will remain with the surviving trustees. If there is no surviving trustee, the legal personal representatives of the last trustee to die will need to appoint new trustees to assume legal ownership of the bond and administer the trust.

Taxation of the bondholder

  • To ensure the tax efficiency of your bond our fund reviewing process is designed to ensure that your bond is not classed as a Personal Portfolio Bond by HM Revenue & Customs.

  • It is your responsibility to obtain advice from your financial adviser or applicable tax authority on the taxation implications of owning the bond.

  • Depending on your country of residency a tax liability may arise (such as income tax or premium tax, for example) as a result of investing in one of our bonds.

  • We may make a deduction from your bond to pay this tax where we are legally obliged to do so. We’ll tell you when we make such a deduction. Where there is no legal obligation on us to make a deduction, any tax liability that may arise will be your responsibility.

  • If you die, tax may be payable depending on the individual circumstances at the time.

  • This is only a general tax summary. The tax situation may change in the future, and, as indicated you should seek your own professional tax advices.

  • For all bondholders, a liability to tax may typically arise when money is withdrawn from the bond and a gain arises as follows:

    • 1.

      When cashing in part of individual policies You can withdraw up to 5% of the original investment amount in each individual policy every policy year as ‘income’with no immediate tax charge. This 5% amount can be taken every year for 20 years, or accumulated over a number of years. The 5% allowance is cumulative, if it is not used in one year, it can be transferred to the next and so on. If this allowance is exceeded in any one year, the excess will be treated as a gain and may give rise to a liability to income tax.

    • 2.

      On death of the last life assured, or cashing in all of the bond or individual policies When the bond or individual policy comes to an end, there may be a liability to income tax on any gain made. The chargeable gain is the amount by which the final cash-in value proceeds exceed the total investments paid, taking into account any previous part encashments and gains.

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