Investment Bond

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    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.


    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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