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Where Taxpayers and Advisers Meet

Investment Bond - segment encashments / increments

sentinell
Posts:17
Joined:Wed Mar 11, 2009 5:04 pm
Investment Bond - segment encashments / increments

Postby sentinell » Sat May 08, 2021 12:23 pm

Hi,

I wonder if someone could jog my memory.

I know that if an investment bond is incremented by way of additional segments, then those segments have a different number of relevant years if the whole bond is surrendered.

However, in an extreme hypothetical situation, lets say an investment bond is set up on 05/01/2010 and incremented by way of additional segments a few years later on 5 May. Now, assume money is raised by way of segment surrender where 2 of the original segments are encashed, and 2 of the incremented segments are encashed.

Am I correct in assuming that the incremented segments will have their own year end (4 May), as they are technically individual sub-policies, so potentially could fall into a different tax year for income tax purposes ?

Just need to clarify this in my own mind.

Thanks
Rgds
Neil

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