Investment bonds
A wrapper with its own tax rules, and a withdrawal trap that costs people thousands.
Investment bonds are insurance policies rather than investments in the ordinary sense, and they come with a tax regime that works nothing like an ISA, a pension or a general account. Nothing is taxed while the money sits there. Tax arrives at specific moments called chargeable events, calculated in a way that can produce a bill wildly out of proportion to any actual profit. Most people who own one were advised into it and have never had the mechanics explained. This topic covers how the tax works, and in particular how to take money out without triggering a charge you didn't need to.
An insurance policy holding investments, taxed only when something happens to it.
Withdraw up to 5% a year with no immediate tax — and understand what 'immediate' is doing in that sentence.
The moments tax falls due, and how the gain is worked out.
Relief for gains built up over years but taxed in one, and why it doesn't always help.
Two methods, wildly different outcomes, and the mistake that costs people thousands.