The advice and/or guidance contained within this site is subjected to the UK Regulatory regime and is therefore targeted at consumers based in the UK.

Please be aware of the following risk warnings: The past performance of an investment is not a guide to its future performance.

The value of investments, and any income from them, may go down as well as up and is not guaranteed. An investor may not get back the amount originally invested.

Tax reliefs are those currently available and are subject to change.

If the funds you invest in hold securities in a currency other than sterling, exchange rate fluctuations may affect the value of your overall investment.

McQuistin Financial is an Appointed Representative of Sesame Ltd. which is authorised and regulated by the Financial Services Authority. Sesame is entered on the FSA register (www.fsa.gov.uk/register/) under reference 150427.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Investment Bonds.

What are they?

Investment bonds are sold by life insurance companies. They let you invest in a selection of investment funds managed by professional investment managers.

They are usually designed to create long term capital growth, but can also be used to provide an income. Normally the minimum investment is in the region of £5,000 or £10,000. Each fund will hold a portfolio of investments, for example in shares or bonds, and the price of your units will normally rise or fall in line with the value of these investments.

Taxation

Bonds are technically life insurance policies and the insurance company must pay tax on the income and capital growth generated by the investments held.

Investors do not pay capital gains tax on gains, neither do they pay basic rate tax on income. Higher rate taxpayers can become liable to tax if they cash in their bonds or make partial withdrawals of over 5 per cent per annum of their original investment.

You should consider Investment bonds if...

• If you are a higher rate taxpayer looking for extra income.
• If you are retired and require a supplementary income.
• If you are already an active investor with a large portfolio and already utilising your annual capital gains tax allowance.
• If you are attempting to shelter capital from inheritance tax via a loan or discounted gift trust.
• If you are an investor who is likely to need long term care.
  

Before you buy an investment bond you should make full use of your annual ISA allowances and also consider using Unit Trusts or OIECs.

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