Aegon and Canada Life International have closed their segmented offshore bonds to new business after the Government’s clampdown on the products.
Documents published alongside the Budget in March seek to restrict the use of offshore bonds that are structured so that any gain made across the whole bond arises in only one segment or policy. Previously, these bonds allowed withdrawals from all the other segments, where the gains do not arise, without fear of a chargeable event arising.
The change means all policies are treated as one policy in the event of a chargeable withdrawal. This effectively attributes a share of the gain to all segments.
Aegon manager of investment products, tax and regulation Margaret Jago says: “We will decide on top-ups when final rules have been published.”
CLI plans to write to existing policyholders in May to clarify how they will be affected.