Tax on investment

C

cash_cow

Registered User
Messages
31
Hi there,
My father invested in a savings policy which was for 5.5 yrs. bank manager says that tax is due if he doesn't hold the funds for 8yrs. Is there some 8 yr rule on the taxation.
Thanks
 
The structure is likely to be one where, if he's sitting on a gain, he'll pay tax at 41% on the gain when he exits the investment or automatically after 8 years. The "8 year rule" exists to stop people rolling up that type of investment indefinitely.
 
Gordon Gekko said:
The structure is likely to be one where, if he's sitting on a gain, he'll pay tax at 41% on the gain when he exits the investment or automatically after 8 years. The "8 year rule" exists to stop people rolling up that type of investment indefinitely.
Click to expand...
 
Thanks,
So now wondering how the tax would work if he exits now. Would a individual return need to be filed for each of the years invested? Or does form11/12 allow option to submit one return.
And is the any benefit to continue for 8 year cycle?
 
Is it "life wrapped"...i.e. a policy through a life company (e.g. BOI Life, New Ireland, Ark Life)?

If so, all of the tax obligations are taken care of at source and it doesn't need to go near a tax return.

Re the 8 year cycle, it's impossible to say as who knows how the investment will perform?
 
Thanks Gordon,
yes the policy is via BOI and tax has been deducted directly by them. Is there any tax allowances that can be used to offset against this figure - like for example CGT allowance, or is it treated differently than shares?
 
No CGT loss relief or allowance applies. ITs totally separate, called "exit tax"
 
You must log in or register to reply here.
Back
Top