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Where Taxpayers and Advisers Meet

Tax Return entry for Investment Bond withdrawals

ronaskew
Posts:19
Joined:Wed Aug 06, 2008 3:10 pm
Tax Return entry for Investment Bond withdrawals

Postby ronaskew » Sun Jun 20, 2021 2:47 pm

In June 2020 I activated an "Income for Life" Bond from Metlife. This is an Offshore Investment Bond, which will now pay me a set sum every month for life.
My question is -
Do I need to declare these withdrawals on my Tax Return, since the total annual withdrawal is less than 5% of the initial fund value? (Although I thought that up to 5% did not incur tax, I don't know if I have to declare anything to HMRC?)
If I do, then how/where and what do I fill in on my tax return? (I'm so confused with the "Foreign" pages.)

Thanks in advance for any clarification you can provide
Ron

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Tax Return entry for Investment Bond withdrawals

Postby maths » Sun Jun 20, 2021 4:41 pm

If there is any UK income tax to pay due to a chargeable event gain the insurers would issue you with a certificate indicating the relevant figures to include in the Tax Return.

If you do not receive such a certificate then prima facie you have no income tax to pay and no disclosure on the Tax Return is necessary; this would often be the case where the 5% maximum per annum withdrawals are not exceeded.

As you policy is a foreign, not UK, policy any disclosures would be made on SA 106 in Boxes 43 to 45. See HS 321.

ronaskew
Posts:19
Joined:Wed Aug 06, 2008 3:10 pm

Re: Tax Return entry for Investment Bond withdrawals

Postby ronaskew » Mon Jun 21, 2021 9:52 am

Many thanks for the reply. Your answer has confirmed what I was thinking, but, since it's the first time for me, I thought I would check.
I've not received any chargeable event certificate from Metlife, so I won't be including anything on this year's return.
Ron

PS. Because of low gains on the bond, I decided to surrender it earlier this month and invest elsewhere. I've since received a chargeable event certificate, and will be including its details on my 2021/22 Tax Return - on SA106 as you mention in your reply.
Thanks again for the info.


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