Questions and Answers

Q1. is my money guaranteed?

No, the value of your investment in the Bond can go down as well as up and you may not get back the original amount invested.

Q2. what might I get back?

Your financial adviser will provide you with an illustration of what your unit-linked bond might provide. The amount you get back will depend on:

• how much you have invested
  
  
• how long your premiums have been invested for
  
  
• the investment performance of your chosen fund or funds
  
  
• how much you have previously withdrawn
  
  
• the charges that we have taken
  
  
• any tax due when you cash it in.

Q3. what charges are there?

When you purchase a bond you will receive a personal key features illustration, giving details of the charges made for managing your bond and investments, how they are taken, and the effect they could have on the value of your bond.

Charges applied to your Bond are used to pay:

• the bond provider (Skandia)
• the fund managers of the funds you invest in
• your financial adviser.

With the exception of the Collective Investment Bond (initial charge option) we also make an Early Encashment Charge* under certain circumstances. The actual amount of any Early Encashment Charge will vary and is dependent on a number of factors.

There is normally no charge for fund switches, however we reserve the right to introduce a charge in the future.

Q4. can I take money out?

You can make withdrawals of up to 5% per year of the amount you originally invested, without any immediate tax liability.

When thinking about withdrawing money from a bond you should consider any tax implications. See Q5 ‘what about tax?’

Q5. what about tax?

Personal tax

• You will not normally have to pay any basic rate income tax or capital gains tax in connection with your Bond.
• You may withdraw up to 5% of your original investment (plus any top-ups) each year for at least 20 years without any immediate liability to income tax.
• If you withdraw more than 5% a year, or withdraw a total of more than you invested, you may be liable to tax*.
• When you finally cash in your Bond, you may have to pay income tax on any gain you have made. This could also affect your right to age-related personal reliefs and any entitlement to children’s tax credit*.
• On the death of the life or lives assured, your Bond is treated for tax purposes as though you had fully cashed it in just before the death.
• If you have set up your Bond under trust it will be treated accordingly for tax purposes. See ‘tax under trust’ below

*The tax position of your Bond may change in the future. You may be subject to additional taxes or costs which are not accounted for within the contract. Please refer to your financial adviser for advice about tax liabilities.

Tax under trust

When you set up your Bond under trust, any liability to tax will depend on several factors, including the type of trust. If you are thinking of setting your unit-linked bond up under trust, you should speak to your financial adviser.

Tax on funds

The various funds that your money is invested in are subject to taxation on income and gains. However, the price you pay for units in your fund takes account of these charges, so you will have nothing further to pay in relation to tax on funds.