Investment Bonds - large part surrender across several bonds

[sentinell]

Hi all,

Say, for instance, Mr X takes £35,000 across three investment bonds as part surrenders, not segment encashments. Maybe not the best idea, but he does it anyway. There are no unused allowances, so this is all excess and therefore incurs Chargeable Gains.

Now, lets assume because of when the policy year ends on each bond, two of the bonds fall within the current tax-year, and one falls within the next tax year.

According to my understanding, the Chargeable Gain is fixed, and a known quantity, but for tax purposes, even though the withdrawals were taken around the same time, this would not be treated as one aggregate calculation.

I assume you would:

* Do an aggregate calculation on the part of the gains from the two bonds treated as incurred in the current tax year
* Do a theoretical calculation for the part relating to the bond that is liable next tax-year (subject to thresholds next year)

Is this correct ? In this scenario he may or may not be liable for additional income tax for this tax-year, and likewise for the next tax-year. Therefore, it would be incorrect to try and sweep them up under one calculation ?

Thanks
Any comments appreciated.
Neil

[maths]

Where a partial surrender produces an excess event the charge on the excess event arises at the end of the so-called insurance year.

EG Surrender occurs on 1 April 2020 but policy year terminates on 30 June 2020 then the charge is treated as arising in tax year 20/21 not 19/20.