The funds in the Estate Planning Bond can grow free of tax while they are held in the bond, with the exception of withholding tax, which is deducted at source from certain funds. And the funds can be switched free of tax too. Tax will usually only be payable on any gains when money is taken out.
That’s not all: your clients’ regular withdrawals could also be tax-efficient. They can take up to 5% of their original investment amount a year, up to a total of 100% of their original investment amount over 20 years, without any immediate tax liability.
To allow even more tax flexibility, and help your clients’ trustees when they eventually come to distribute the fund between the beneficiaries – the Estate Planning Bond is split into a group of individual policy segments, which can all be cashed in individually.