STM Life offers clients a broad range of tax-efficient bonds giving investors more control over when they pay tax. A Bond from STM Life can be perfectly suited for clients investing to grow their capital or for those looking to take an income.
While invested in a UK compliant bond from STM Life, investors will not normally pay tax on any growth. Instead, tax is paid when money is taken out of the bond and will be based on the circumstances of the investor at that time. It is designed to help customers with a range of needs including estate and retirement planning.
Key benefits of a bond from STM Life include:
- Gross RollUp - the underlying portfolio gains (other than withholding tax) are not subject to tax at source
- Control of Tax Point - you can choose when to take benefits, for example when you are a lower rate tax payer or no longer a UK resident
- Time Apportionment Relief - if you are likely to spend time living outside the UK then any chargeable gain arising on the bond will be reduced in proportion to the period of time that you have been non-UK resident
- Wide Range of Allowable Assets
- Bond Assignment - assignment between spouses and civil partners are generally exempt from UK inheritance tax and therefore it may be tax efficient to assign the bond to a spouse/civil partner who is a non taxpayer
- Inheritance Tax Planning assigning a bond into trust can allow the beneficiary to make withdrawals or cash in the bond when the trust is wound up. This could reduce tax as they may be a basic or non taxpayer.
STM Life offers two products which are all traditional unit linked, whole of life assurance contracts. The two bonds differ from each other in terms of the diverse range of assets that can be invested within each bond. In particular:
International Portfolio Bond (IPB)
The International Portfolio Bond is the "traditional life insurance bond" which allows the policyholder to invest in a limited choice of assets. For example, units in an authorised unit trust, or shares in an investment trust and cash. The policyholder can have direct involvement in the selection of assets that the IPB invests into or the policyholder may choose to appoint a discretionary manager to manage the assets within the bond.
International Self Directed Bond (ISDB)
The International Self Directed Bond allows for a far wider range of allowable assets, for example, private company shares, vintage cars, equities and property can all be accommodated within the bond and the policyholder has direct involvement in the selection of assets that the ISDB invests into. For UK residents, this bond will be treated as a personalised bond as the policyholder can have the power to select the assets that will be held within it.