This report examines the proposed changes to the CGT regime in the UK announced by the Chancellor in October 2007. It examines the likely impact on the sale of bonds by life companies and suggests some future strategies to consolidate their market position.

Scope

This report examines the current and future relationship between CGT and the investment bond market in the UK. Extensive secondary research and primary research with industry representatives was undertaken to assess the current and future bond market. Future strategies for life companies in the UK are difficult to determine in a time of uncertainty.

Highlights

Although future strategies are difficult to determine in an uncertain market, Datamonitor focuses on some key ways forward for life companies, irrespective of whether the CGT reforms go through as envisaged. Datamonitor concludes that there are still circumstances where investment bonds are still an appropriate choice and therefore the outcome for life companies may not be as precarious as some have predicted. The CGT system is one that has continuously evolved since it was first introduced in 1965 and therefore life companies are familiar with upheaval and have the ability to adapt to market changes.

Reasons to Purchase

Offers in-depth insights into the how the existing CGT structure has advantaged life companies selling investment bonds. Provides detailed analysis of the proposed changes announced by the Chancellor in his PBR and their impact on life companies. Assists life companies operating in the market to improve their market position if the CGT changes go ahead as announced.