The Association of British Insurers (ABI) says savers face confusion and uncertainty because the government failed to make concessions to the insurance industry on the taxation of investment bonds.
Peter Vipond, ABI’s director of taxation, said the government’s CGT proposals were made without consideration of the impact on consumers who held investment bonds and the wider consequence for savers.
Chancellor Alistair Darling has ignored ABI’s calls to change the taxation of investment bonds. The budget report confirmed: ‘The Government does not see the need for any change to the taxation of life insurance bonds as a result of CGT reform’, citywire.com reports.
The industry fears the lack of compromise from the government on the issue could hurt insurers who sold £30bn worth of bonds in 2006. There were 5m bond policyholders in the country, 10% of whom were higher rate taxpayers.
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