Each input section of this tool is variable.

The growth rate is capped at 8% for each investment wrapper.

Wrapper charges are not included in the calculation, hence you may wish to assume a lower growth rate to reflect the charges you feel would apply to each investment wrapper.

The growth rates do not differentiate between net and gross returns. This will allow you flexibility to apply the growth rate you feel would apply depending on the nature of the fund and investment wrapper eg UK life fund 5.6% or offshore fund 7% (example purposes only).

The default on any numerical input is 0.

The tool calculates when tax could be payable, based on the investment returns and withdrawals taken. Values are shown to a maximum of 40 years.

If a 5% withdrawal is taken from the bond, a tax liability would potentially arise after 20 years. Reducing this and increasing the withdrawal from the collective could extend the period of tax-efficient withdrawals without impacting the actual level of withdrawal received.

Where interest or dividends are distributed from a collective an immediate liability to income tax will arise. This is not addressed in this tool.

Growth above that assumed in the calculation may result in tax being payable earlier than expected. Annual reviews are essential when using this approach to withdrawal extraction from either a bond or collective.

Investment returns will fluctuate and this will mean that the gain calculation for collectives and bonds will vary. A year of significant growth for the collective could mean that more 'gain' and less capital is realised on a withdrawal with the potential impact of tax being paid earlier than expected. The CGT assumption may also not increase in line with assumptions made.

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