Page 24 - PMD Financial Advisers_An introduction to investing

Investment bonds
Investment bonds (otherwise known as insurance bonds) are investment vehicles which may
In an investment bond, investors contributing either a lump sum or regular deposits, receive “tax paid” returns whilst funds are invested. The income from the underlying investments is taxed at the current company tax rate of 30% and do not need to be included in the investor’s tax return. The investor may be an individual (up to three individuals holding the one investment),
a trust or a company.
Investment bond
Managed fund
Investment earnings
$10,000
Investment earnings
$10,000
Tax paid by bond manager
$3,000
Tax paid by fund manager
$0
Net return (at maturity)
$7,000
Assessable income
$10,000
Assessable income
$0
Tax paid by investor
($4,500)
After tax return
$7,000
After tax return
$5,500
Investment bonds may be suitable for:
• Investorswhoneedanalternativetaxstructureoutsideofsuper •
•
• Investors wishing to lower their taxable income
help you more if you are unsure if an investment bond is the right investment vehicle for you.
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