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. ...

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