This one has always intrigued me. Withdrawals from single premium investment bonds are sold as income and are liable to income tax.
We all know that, in one sense, they are repayments of the original investment, but is it absolutely certain they are not “income” within IHTA s21?
In this case I would want to argue the issue with HMRC, just as I would in a case where an individual had invested all his savings in investment bonds, was living from the “income” they provided but decided to give some of it away.
Anthony Nixon
Irwin Mitchell Private Wealth