Tax on Investment Bond?

Dave14 | 10:14 Thu 24th May 2012 | Business & Finance

4 Answers

If I cash in an Investment Bond, on which tax is paid on the interest at source, should I declare the interest as "Unearned Income" or "Capital Gains" on my tax return? Thank you for any advice.

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buildersmate

The HMRC rules about these are not as striaghtforward as other financial services products.
I suggest you read this, then come back again if you have further questions.
http://www.thefundsup.../Investment_bonds.htm

Dave14

Question Author

Thank you 'buildersmate', your answer clarifes nearly everything. Just one additional query - Do you know if I can declare any profit (or loss!) under 'Capital Gains' rather than 'Unearned Income'?

buildersmate

I think you will have to look at the way the earnings have been declared on your specific bond; some of the 'profit' will be created from growth in the bond (capital gain) and some of it will be returns.

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