According to TISA, the trade body for tax-exempt investments, the Chancellor’s announcement on proposed CGT changes in his Pre-Budget Report significantly changed the attractiveness, and possibly the suitability, of single premium investment bonds for current and future trends.

While TISA has played an active role in facilitating dialogue and fostering a better understanding in all quarters about how the changes might impact the market, it believes that there is an altogether better way forward.

Ahead of the 2008 Budget, TISA has written to ask that the Treasury consider changing the rules on investment bond transfers. Under its proposals, individuals could switch between investment bonds and/or providers without triggering a taxable event.

Tax-free transfers would also bring this wrapper in line with most other tax-incentivised schemes, such as pensions, ISAs and child trust funds. Transfers would promote competition in the marketplace and allow consumers to choose the best product and investments for them as their needs and appetite change or as the market develops.

While most of the industry is focused solely on taxation and attractiveness as compared with other forms of collective investments, TISA believes its changes would make a greater impact given the long-term nature of single premium investment bond holdings and that single premium investment bonds still have a place for many as a part of their wider financial planning.

TISA director general, Tony Vine-Lott, comments, ‘TISA believes that single premium investment bonds are a useful tool as part of many consumers’ long-term savings and retirement needs. Enabling bonds to be transferred tax-free in the same way as other major savings schemes would further enhance the attractiveness and suitability of this market, while giving consumers the confidence that they can always choose the best option for their needs.’