Can you transfer an investment bond to another provider? 2024 Guide

image of an investment bond conteact , image is cartoon based and shows a pen for blog titles can i transfer an investment bond

Yes, it is possible to transfer an investment bond to another provider, but this depends on what bond you hold. If the bond you hold is an ISA, Collective Investment Account or Collective Retirement Account, then you can transfer this to any provider without incurring any cost. However other products such as a Collective Investment Bond are non-transferable, in this instance, your only option would be to surrender the bond which may involve a fee.

 

Before making any financial decision, you should consult with a professional this can potentially save a lot of time, money and headache.

 

If you hold any financial instrument, one of the first things you learn is to always have an exit strategy. In this article we will look at different bonds and how there transferred along with the importance and execution of exit strategies.

 

Investment Bonds – Here’s what you need to know

 

Believe it or not, investment bonds are actually a type of life insurance, but the insurance element is actually quite small and only there so the bond can be taxed thusly. The reason for this is taxation, offshore bonds pay virtually no taxes on gains or interest and onshore bonds pay the lowest possible tax available.

 

The other element which mirrors life insurance is that it is paid out upon your death, but it can also be surrendered early (often incurs fees) or on the bond’s maturity date.

 

Before purchasing a bond should consider whether or not you meet the criteria required.

 

  • Have at least £10,000 that you wish to invest.
  • That you can afford to invest your savings for a set amount of time.
  • Are comfortable with the potential risks and fluctuating value of your investment.

rendering of an investment bond in gold and black

What’s an exit strategy?

An exit strategy is very self-explanatory, it’s the process one takes when wishing to exit a situation. In investing it’s no different, your exit strategy is a predefined series of actions taken once an investment reaches a certain value, age or specific criteria. When we say exit strategy, what we mean is liquidated. (Bringing the financial asset back to its cash form.

 

Why do you need an investment exit strategy?

 

Even to this day bonds are used as a tax mechanism often they are placed in a trust because they minimise the tax implication and administrative charges. But in order to ensure that the bonds are as tax efficient as possible, the holder (owner) must also liquidate them at a time and in a method which would see the bonds be as tax efficient as possible.

 

How to buy an investment bond?

 

There are many different ways to purchase an investment bond, but the best technique is to first consult with an independent financial advisor. As with any large purchase, consulting professional advice is the best way to ensure you fully understand the pros and cons of the purchase. It may well be that after consulting with your financial advisor, they ascertain that given your circumstances there is a product that better suits your requirements.

image of gold investment coins in a large pile

 

Frequently asked questions.

 

Can investment bonds be transferred?

Yes, investment bonds can generally be transferred from one owner to another, but the process and conditions might vary depending on the specific bond and its terms. It’s important to check with the provider to understand the transfer process and any associated costs or implications.

Can you transfer an offshore bond to another provider?

Yes, it’s usually possible to transfer an offshore investment bond to a different financial provider. However, there could be certain rules, fees, or tax considerations involved. It’s recommended to consult both the current and prospective providers to understand the steps and potential consequences.

Can you put an existing investment bond into a trust?

Yes, you can place an existing investment bond into a trust. By doing so, you are essentially transferring ownership of the bond to the trust, which can have various benefits, such as managing inheritance tax and controlling how the bond’s proceeds are distributed to beneficiaries. Setting up a trust involves legal and financial considerations, so professional advice is advisable.

What happens after 20 years with an investment bond?

After 20 years of holding an investment bond, there can be significant tax advantages in some cases. This is because in many tax systems, there’s a period known as the “tax-deferred” or “qualifying” period. During this time, gains made within the bond are not immediately subject to income tax. However, what happens next can depend on your individual circumstances and the laws in your country. It’s wise to consult with a financial advisor to understand the implications after the 20-year period.

For more advice on taxation best practices always consult with your tax specialist and of course the HMRC.

 

Investment Bond Specialist

 

New Capital Link is the UK’s leading introducer of investment bonds, through our extensive network of agents, we are uniquely positioned to research and identify the best possible offering for all investment levels and appetites.

If you would like to save time and money then our experienced and friendly team can help. – Contact us today and make your tomorrow a wealthier one

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Rachel Buscall

Co-Founder & Managing Director at New Capital Link.

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