Chargeable Gain Calculation Help

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?



  • CaroCaro Member

    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

  • Colin

    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.
    Benjamin Fabi 
  • 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

    Benjamin Fabi 
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