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125 Amp
Investment Solution by AMP
Investment bonds are also known as insurance bonds; these are long-term tax paid investments. Investment bonds have a minimum term of 10 years, but this can be extended at any time to a maximum of 40 years, without forfeiting the right to withdraw the investment at any time. Earnings are taxed at a fund manager level, at a maximum rate of 30%, and provided the investment is held for at least 10 years, no additional tax is payable by the investor. This makes investment bonds a tax-effective investment strategy – especially for those with a high marginal tax rate of up to 46.5% (including the Medicare levy of 1.5%) and simple too, unless the investment is withdrawn within 10 years investors are not required to report earnings in their annual tax return.
If the investment bond is held for more than 10 years with no withdrawals, and meets some simple requirements, the investor only pays 30 per cent tax on their investment earnings regardless of their marginal tax rate.
Since tax has already been paid within the product at a rate of 30 per cent, investors do not have to declare their investment earnings in their tax return.
Withdrawals after the 10th policy anniversary- All of the investment earnings are tax paid. You don't need to pay any personal tax on withdrawals.
You can withdraw $1,000 or more at any time provided you maintain a minimum balance of $2,500. Withdrawing does not impact the 10 year period. Part or all of the investment earning will be included in your assessable income for tax purpose. You will also receive a 30% tax offset relating to these earning.
You can set up your AMP Growth Bond so it is dealt with outside your estate Unlike superannuation, you are not restricted on who you can nominate as a beneficiary and any proceeds of the bond, as a result of death, can be paid how you intended quickly without the potential delays and cost of probate.
Making a withdrawal, including during 10 years of period, does not impact the 10 year period or the 125% contribution opportunity.
Using the child advancement version, the growth bond can be transferred easily once the child reaches the nominated age (between 10 and 25) without them having to pay tax, stamp duty, or fees and charges as a result of transfer. This option can be used by anyone wanting to invest on behalf of a child under 16 years, including parents, grandparents, and family friends.
About the Author
Jasper Smith I am an experienced financial advisor and a big investor, investment makes me independent as I don't have to rely on anybody. I like to write on managed funds and investment bondsincluding onshore bonds & offshore bonds.

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