Investment Bond

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  • #31774
    liffe
    Participant

    We have received a new claim from a customer who has recently invested £82,000 in a 10 year fixed rate bond. There is life insurance attached to it.
    Does this mean we have to distrgard it? She can access the capital, but would incur penalties.

    #88881
    Anonymous
    Guest

    Lots of savings products have these life assurance/insurance elements nowadays, normally for tax purposes. It is tentatively arguable that such a bond is not a life insurance policy and therefore would not be disregarded. Have a search on “life assurance” for previous threads.

    In my latest appeal submission dealing with one of these I half-heartedly argued that the bond should not be disregarded, but primarly concentrated on deprivation of capital. See (IS) 7/98 where Commissioner Howell suggests that deprivation should be considered in all cases involving investment bonds which are written as life assurance policies: “the amount invested has to be added back as notional capital if reliance on income support then or later was within the claimant’s purpose and contemplation”.

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