The investment bond calculator will give an indication of the Chargeable Event Gain on a withdrawal from an Investment Bond. It will also show the Top Slice Divisor for the chargeable gain.
The calculator will take into account whether there has been any;
– Additional investments made,
– Previous Partial Surrenders (using the annual 5% tax deferred allowance for 20 years) and/or
– Previous Full Surrender of segments.
If there has been previous Partial Surrenders and Full Surrender of segments, once the Partial Surrender withdrawal amount received has been input then the calculator will proportion the Partial Surrender withdrawal and Tax Deferred Allowances to use when calculating subsequent Chargeable Event Gains.
The calculator will also show the tax year of assessment of the chargeable gain. This is because;
- For Full Surrenders, the Chargeable Event Date is treated as arising on the actual date of the Full Surrender.
- Whereas for Partial Surrenders, the Chargeable Event Date it is the last day of the policy year in which the partial surrender exceeds the 5% allowance, so the chargeable event date could be in the next tax year following the actual part surrender transaction.
Once all the chargeable gains are known for every withdrawal that are to be assessed in the same tax year, to then calculate any potential increase in income tax as a result of the withdrawals, details should be input into the Chargeable Gain Income Tax calculator.
