‘Non-qualifying life insurance policies can also have tax advantages.’

Money Advice Service1

Investment bonds are single-premium life insurance policies issued by either a UK (onshore) or overseas (offshore) life assurance company. While the policy usually pays a slightly higher amount than the policy value on the death of the bond life assured, this is usually very small (typically 1% of the value).

Capital gains arising within an onshore bond will be subject to the life company’s tax rate (currently 20%) after allowing for indexation relief and expenses. Gains arising within an offshore bond will be exempt from tax. UK dividends received inside a UK life fund bear no further tax and the investor ...

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