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Daily Insurance Industry News
Wednesday 22nd of May 2019
June 21, 2010

Insurance bonds could be helped by CGT changes

by Richard Kilner

Story link: Insurance bonds could be helped by CGT changes

Defaqto, the independent financial research company, has issued a guide indicating that the probable changes to capital gains tax (CGT) at the forthcoming Budget could see a surge in popularity for insurance bonds.

Insight Analyst for Wealth Management David Abbis explained that changes in 2008 to CGT made mutual bonds a more attractive proposition than insurance bonds.

However, with Chancellor George Osborne likely to raise the rate of CGT and reduce the exemption threshold insurance bonds could see greater popularity, as they are subject to different tax laws.

Earlier this month the British Insurance Brokers’ Association (BIBA) warned against the possible increase of the Insurance Premium Tax (IPT), presently standing at 5%, arguing that it would dissuade consumers from taking out appropriate cover.

The BIBA also warned that such a move would prove counter-productive, asserting that a rise would lead to a net decline in the tax take.

 

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