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Where Taxpayers and Advisers Meet

Growth Bond

aedunlop
Posts:3
Joined:Tue Sep 26, 2023 8:24 am
Growth Bond

Postby aedunlop » Tue Sep 26, 2023 3:12 pm

I invested in a 3-year development growth bond paying 30% of the sum invested when it matures. The Developers tax advisors consider the growth id subject to CGT as there is a significant is risk and the investment is not covered by the FCA £85,000 guarantee. Are they correct or is the growth subject to income tax?

pawncob
Posts:5084
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Growth Bond

Postby pawncob » Tue Sep 26, 2023 7:05 pm

"Structured products" such as this are usually subject to CGT, but it depends on the wording of the agreement.
With a pinch of salt take what I say, but don't exceed your RDA

aedunlop
Posts:3
Joined:Tue Sep 26, 2023 8:24 am

Re: Growth Bond

Postby aedunlop » Wed Sep 27, 2023 5:36 pm

Thank you pawncob - the wording of the bond states 'INVESTED CAPITAL IS AT RISK. Investors may lose some or all of their original investment. Past performance and return illustrations are not a reliable indicator of future performance' I think the issuer is relying on this wording i.e.the risk to support their contention that the growth is subject to CGT. The growth is paid at the end of the 3-year term - does this be considered a 'structured product'? The investment is nor FCA regulated.


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