Neil Jones: Three reasons to choose a UK investment bond

Credit for tax-free dividend income

clock • 8 min read

While there is an old saying regarding the 'investment tail of a tax dog', writes Neil Jones, the effective use of tax wrappers can help increase the net return to an investor

UK investment bonds have, for too long, been overshadowed by alternative tax wrappers and the perception that tax within a life fund is a disadvantage. This thinking can automatically discount an investment solution that can be very favourable - especially when you consider the tax changes over recent years. There are three great reasons why advisers should be recommending UK investment bonds to clients: they provide a credit for tax-free dividend income; the freezing of the indexation factor; and the benefits from the order of taxation when held with other investments in tax wrappers. ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax planning

IHT reform 'unnecessarily complex': Agricultural and Business Property Relief plans under the microscope

IHT reform 'unnecessarily complex': Agricultural and Business Property Relief plans under the microscope

'The government has demonstrated some recognition that paying the IHT on qualifying assets may be difficult'

Sarah Wray
clock 18 March 2025 • 4 min read
Myth-busting HNW clients' most common misconceptions

Myth-busting HNW clients' most common misconceptions

‘I heard it from my mate down the pub…’

Rick Gosling
clock 13 March 2025 • 5 min read
Passing on wealth: How IHT changes will affect pension planning

Passing on wealth: How IHT changes will affect pension planning

'Change could result in significantly higher tax liabilities '

Joshua Croft
clock 11 March 2025 • 4 min read