• An investment bond can be linked to an investment fund on a unit linked or With Profits basis but the workings of both are generally the same.
  
• Bonds can be set up on a single life, or joint life basis.
  Within an Inheritance tax (IHT) mitigation strategy, they can be set up in Trust for the benefit of children
  
• Regular withdrawals can be taken from the investment at outset or whenever appropriate but an investor should be aware that if monies are withdrawn at a faster rate than your investment grows, the value of the investment will reduce.
  
• The investment pays basic rate tax within the fund and as such there is no further liability to tax for a basic rate tax payer. If income or withdrawals exceed an amount in excess of 5% of the original invested capital there may be a further tax liability to higher rate tax payers.
  
• On death the value of the fund is commonly enhanced by 1% and a With Profits investment may well benefit from a “terminal bonus” although this is not guaranteed.
  
• Early surrender penalties are now common for the initial five year period and for this reason this investment should be viewed as a five year minimum investment.
  
• In the past there was an initial charge made when making this type of investment but gradually this has been removed with a slight increase in the annual management
  charge to reflect this and pay for the initial set up costs.
  
• AMC charges range from 1% to 2% dependent on the investment selected and this type of investment allows you the opportunity to create an “investment portfolio” that suits your individual situation and reflect your opinion as to which areas of investment will perform the best.
  
• Most bonds allow you to switch between funds at no cost in order that your investment can continue to reflect your investment attitude or indeed your changing priorities as you get older.

Trusts
Most providers allow their bonds to be “placed” into trust with the completion of a simple trust form issued to you by the Company.
This is particularly useful in that you can invest into a bond, in your own name and for your own use now, and at a later date place the investment into the protective wrapper of a trust – as a gift for IHT purposes - at no additional cost.

The value of an investment is not guaranteed and can go up and down depending on investment performance. You could get back less than you have paid in.

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