Changing the Tax Treatment of Life Event Products

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Currently life-event financial products, education bonds and insurance bonds, are subject to taxation on income within the fund operated by providers friendly societies) at a tax rate of 30 per cent. That tax rate applies to income such as interest or dividends on assets held as well as to realized capital gains – regardless of the time for which the asset has been held. This is in contrast to the general tax treatment of capital gains which effectively applies a reduced tax to long term capital gains (where the holding period is greater than 12 months), by only including a fraction of the capital gain in taxable income.


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