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Posted Sat, 06 May 2023 13:57:37 GMT by Charlotte Harris
How do you declare a withdrawal from an investment bond in order to pay any tax due? I'm struggling to work out what it comes under & what process I need to follow.
Posted Thu, 11 May 2023 15:53:41 GMT by HMRC Admin 25
Hi Charlotte Harris,
You will need to clarify the type of bond you are referring to, is it the capital you are withdrawing or is it a gain?
Thank you. 

Posted Sat, 13 May 2023 14:41:30 GMT by Charlotte Harris
Hi, I'm withdrawing the whole bond? This is why I'm unsure as to what I need to do. Thank you.
Posted Fri, 19 May 2023 13:25:32 GMT by HMRC Admin 25
Hi Charlotte Harris,

Please can you clarify the type of bond you are referring to?

Thank you. 

Posted Wed, 21 Jun 2023 13:22:42 GMT by Chris Dickson
I have the same question, but with a slightly different bond-withdrawal scenario. My mother has an onshore UK investment bond. She is making monthly withdrawals that are well below the 5% per year or 50,000 gbp per year thresholds. The bond is taxed internally at the appropriate rate. 1. Do the withdrawals need to be declared as income, even though there is no tax liability on them? 2. If so, where do they need to be entered on the form? Thanks for any help!
Posted Mon, 26 Jun 2023 13:58:55 GMT by HMRC Admin 19

Partial surrenders or assignment of approximately up to 5% can be made in each insurance or policy year, without an immediate tax charge being incurred.  

The tax charge is deferred until the next chargeable occasion or the policy matures. When the policy matures, the policy provider will issue a certificate which should be sent to HMRC. The certificate will factor in any payments made over the course of the policy.

Thank you.
Posted Mon, 26 Jun 2023 20:03:06 GMT by Chris Dickson
Thank you for your reply, that is helpful, and clear as far as it goes. Just to confirm what this means for the beneficiary’s annual tax declaration: so there is no requirement for the private individual to declare those withdrawals, as long as they do not exceed the threshold, am I correct? Thanks again, 
Posted Thu, 29 Jun 2023 08:32:27 GMT by Chris Dickson
Hello. Thanks again for your reply a few days ago. I understand that the tax liabilities are taken care of by the platform managing the bond, both annually and when the policy matures. I also understand that those withdrawals by the beneficiary do not incur tax (the relevant thresholds notwithstanding). But I am wondering specifically whether the beneficiary needs to declare such withdrawals on their annual tax statement, even if no tax on them is due. It seems some non-taxable things do sometimes need to be declared anyway. Is there a fixed rule on this either way? We are receiving conflicting advice from the bond platform service provider.
Posted Fri, 30 Jun 2023 07:55:56 GMT by HMRC Admin 20
Hi Chris Dickson,

Yes, that is correct.

Thank you.
Posted Wed, 05 Jul 2023 18:29:57 GMT by HMRC Admin 20
Hi Chris Dickson,

Following a withdrawal, no declaration (in your self assessment tax return) is required unless a  'chargeable event gain' arises, (ie when the policy is fully surrendered) , or a withdrawal exceed the 5% deferred allowance.    
Taxation charges and reliefs relating to individuals, companies and trustees who have entered into contracts with insurance companies

Thank you.
Posted Wed, 05 Jul 2023 20:28:49 GMT by Chris Dickson
Thanks! Exactly the information we were looking for. Much appreciated.
Posted Wed, 12 Jul 2023 09:46:19 GMT by Charlotte Harris
Hi, I managed to speak to HMRC over the phone since my original post to sort things out. Thank you for your help.

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