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Investment bonds
Tax-effective investment solutions tailored for your life

investment bonds

What are investment bonds?

Our investment bonds are designed to provide tax-effective investment solutions to your real life challenges; ‘How do I build wealth tax effectively?’, ‘how can I give my children financial security?’ and ‘how can I pass on my wealth to loved ones without burdening them with additional tax?’

Benefits of investment bonds

Tax-effective
A tax paid investment with tax on earnings paid by us and an effective annual tax rate of up to 30%.
Flexible access at any time
There are no restrictions on when you can access your funds and you can switch investment options at any time.
A range of investment options
Large range of investment options to choose from covering cash, fixed interest, shares, property, responsible investing, alternatives and diversified options.
Alternative to superannuation
Investment bonds are the most tax-effective alternative to superannuation offering you flexibility, control and access at any time.
Invest in a child’s future
Give a child in your life a financial head start with a simple, tax-effective solution.
Pass on your wealth
Investment bonds are structured around your personal wishes. You have the flexibility to control how your wealth is passed on.

What are investment bonds?

 

Our investment bonds are designed to provide tax-effective investment solutions to your real life challenges; ‘How do I build wealth tax-effectively?’, ‘how can I give my children financial security?’ and ‘how can I pass on my wealth to loved ones without burdening them with additional tax?’

The 10-year advantage of investment bonds

 

Investment bonds are tax paid investments, meaning that when earnings are received we pay an effective tax rate of up to 30% of the earnings. If your marginal tax rate is higher than 30%, this makes investment bonds a great tax-effective long term investment.

 

If you invest in the bond for at least 10 years, your growth on the entire investment, including additional contributions, will be tax paid, and withdrawals after the 10th anniversary will be free of any personal tax in your hands - subject to the rules around the 125% opportunity. Also, you will not attract any capital gains tax on withdrawal or when switching between investment options.

Your investment bond is designed to be held for at least 10 years to be most tax effective and offers the continued flexibility to make additional contributions over the life of the investment bond.

While there is no limit on how much you can contribute in your first year, each year following, you can continue to add up to 125% of the previous year’s contributions, without extending your 10 year term for tax purposes. This means, the contributions you make along the way also receive full tax benefits.

It’s your money so it’s important to know you can access it at any time.

However, it’s worth remembering that if you do withdraw part or all of your investment before the 10 years is up, some of the earnings may be taxable, depending on when the withdrawal is made (although you will get a tax offset back).

If you don’t make a contribution to your investment bond for one year, any new contribution in the following years resets the 10 year period.

A simple tax-effective solution

No personal tax payable when investment held for 10-year period if no withdrawals made

No personal tax payable on bond earnings

0 year

30% tax offset benefit applies to any taxable withdrawals

10 years

The 10-year advantage

Year 0–9

No personal tax payable when investment held for 10-year period if no withdrawals made

30% tax offset benefit applies to any taxable withdrawals

Year 10 and beyond

No personal tax payable on bond earnings

Investment bond Superannuation
Liquidity Access at any point Preservation age
Gearing against Investment loans deductible Prohibited
Legislation Simple and stable Complex and unstable
Death tax Tax free on death No more anti-detriment
Unlimited contributions No limits on investment amount Capped
Ownership transfer To any legal entity Restrictions apply
Tax penalty Fully flexible When rules are broken
Tax-free access & distributions At 10 years and death Preservation age & death
No tax reporting Unless withdrawn pre-10 years Unless rules are breached
Switch without CGT Internal to product structure Internal to product structure

Investment bond & Superannuation comparison

Liquidity
Investment bond Access at any point
Superannuation Preservation age
Gearing against
Investment bond Investment loans deductible
Superannuation Prohibited
Legislation
Investment bond Simple and stable
Superannuation Complex and unstable
Death tax
Investment bond Tax free on death
Superannuation No more anti-detriment
Unlimited contributions
Investment bond No limits on investment amount
Superannuation Capped
Ownership transfer
Investment bond To any legal entity
Superannuation Restrictions apply
Tax penalty
Investment bond Fully flexible
Superannuation When rules are broken
Tax-free access & distributions
Investment bond At 10 years and death
Superannuation Preservation age & death
No tax reporting
Investment bond Unless withdrawn pre-10 years
Superannuation Unless rules are breached
Switch without CGT
Investment bond Internal to product structure
Superannuation Internal to product structure

Why investment bonds

Investment earnings are taxed at an effective annual rate of up to 30%

Minimum investment amount of $1,000

Invest a single amount or choose to add to your initial investment each year

A large range of investment options to choose from with the ability to switch between options without personal tax consequences

Complete flexibility to access your investment at any time

Automatic portfolio rebalancing

LifeBuilder’s Future Event feature - control how and when your funds are passed on

Regular Savings Plan with the ability to automatically increase annually

Minimal to no tax reporting provided there are no withdrawals within the 10 year period

Transfer your investment without restarting the 10-year period, preserving its tax paid status

Did you know

 

Generation Life’s LifeBuilder Future Events feature lets you automatically pass on your investment tax effectively at a future set date or on your passing with certainty.

Start Investing Today

Complete your application online.

If you have any questions at any time,
Call 1800 806 362 or
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