Summary Of Changes

The Budget on 12th March clarified the CGT rules that apply for the tax year 2008/09. While there are many factors that influence the suitability of different investment products (including tax treatment, charges, asset mix and the features and flexibility offered by a particular product) it is important to understand how the tax changes affect returns.

Standard Life's view is that advisers can be confident that most of their clients who have investment bonds are as well off with an investment bond as they would be with a mutual fund. If an investment bond was the right choice at the time of sale it is likely to remain so. A justifiable change of products is likely to be the exception rather than the rule.

For some higher rate taxpayers there may be cause to consider whether an investment bond is still the correct choice. Equally, there may be reason to consider whether a Mutual Fund remains appropriate. There is no "one size fits all" answer. Only by considering the combined effect of all of the relevant factors can an appropriate investment solution be identified. In such instances the role of the adviser will be vital, if not indispensable.

Our calculator enables you to enter details of an investment and then view how tax affects the returns from mutual funds, onshore bonds and offshore bonds. We also have a range of technical briefing cards, sales aids and other documents to help you assess the impact of these changes on particular types of investment.

Notes:

• Tax and legislation are likely to change in the future.
• Any reference to legislation and tax is based on Standard Life’s understanding of law and tax practice in the UK and Ireland at the date of publication.
• No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of this information. Tax relief may alter and its value depends on your client's financial circumstances.