Chargeable Gain Calculation Help
Colin1980
Member
Hi All,
Hopefully someone can help me on this!
Current Surrender Value - 3,136,325.92
Plus Previous Withdrawals - £2,295,000
Less Premium Paid - £2,500,000
Less Previous Excess - £235,000
Gives current bond gain of £2,696,325.92
There are 5 segments
Assuming we surrender 1 segment value c. £627,265.18 giving a gain of £539,265.18
If we are looking to surrender a segment in 2 years time - I have assumed a fund value growth of 6% - I am getting confused which figures I would use for my bond gain calculation then:
Projected Fund Value - £2,819,180.64
Plus Previous Withdrawals - What do I include here? the full value of the segment assigned??
Less Premium Paid - £2,500,000
Less Previous Excess - £235,000 (or should this include the gain of the segment surrendered?
Thanks
Comments
Hi Colin - do you mean assigned or surrendered? Also, is it offshore on onshore?
There's a couple of ways to approach the maths.
Personally, I would say in 2 year's time there's going to be 4 remaining segments, so make everything 4/5ths.
that being said, i wonder if your original figure of £2.295 includes full segment surrenders (i.e. there were more than 5 previously)? If so, you only need to add withdrawals from segments that still remain.
Same with all those elements, in fact.
it is all offshore and it was surrendered
Calculate 1 segment as a bond in its own right from the start.
Remembering that when the number of segments falls, any ongoing fixed withdrawal amounts/chargeable events will be higher per remaining segment.
Thank you everyone!
Much appreciated!
Value of 1 segment in 2 years at 6% is:
£627,265.18 * 1.06^2 = £704,795.16
Assuming no more withdrawals or CEs:
(704,795 + 459,000) - (500,000 + 47,000) = £616,795