Onshore and Offshore Bonds, and discounted gift trusts (DGTs) work differently than other types of investments. Within the software, the initial investment into a new Bond, or DGT is entered as a 'purchase' (rather than a 'contribution'). Withdrawals can be taken, and the asset can be fully encashed at some later time. It is also possible to 'top-up' an existing Investment Bond.
1. To schedule the future purchase of a Bond go to the Plus Button and select Savings and Investments, then Investment:
2. Select the Owner of the new investment and add the Account Name.
3. In the Type dropdown, select either Onshore Bond or Offshore Bond, or one of the two types of Discounted Gift Trust.
4. For the question Is this an existing Investment, select No.
5. Enter the Purchase Value.
6. In the Insurance Payout field, if the bond is jointly owned (in the Owner box) you can select First or Last to die.
7. Enter the relevant Fee Rate.
8. For the Life Fund Segments, we would recommend making an assumption (such as 100), rather than leaving the default (1 segment) setting in place.
9. Go to the Timing section, on the left side of the screen. Select two events to indicate when the bond will be purchased and when eventually it will be liquidated.
- Select a start event to indicate when the bond will be purchased (e.g. Retirement, the year of the tax-free cash inflow) and set this as the Start Event
- Select an end event to indicate when the bond will be liquidated (i.e. fully encashed). This might be Mortality or an earlier event might be selected.
If you don't already have events on the timeline that are positioned appropriately to be used as start or end events, new ones can be easily added by clicking into the grey area.
A one-off purchase expense will be created for the Bond, or DGT in the year of the selected event. The purchase should be visible on the Let's See chart, reflected in the position of the need line.
To view the details of the purchase, click the bar/year of the chart in which the purchase is scheduled.
The purchase will be shown as an expense, via the Expenses tab.
The new bond, or DGT will also be shown and tracked, in future years, via the Investments tab.