Discounts Bonds are collective investments issued by insurance companies.
As with unit trusts, many individuals pass their cash to a fund manager who issues them with units. A bond fund particularly differs from a unit trust in the field of taxation. Most of the taxation takes place within the fund - the insurance company paying both corporation and capital gains tax. Bonds are not normally suitable for non-taxpayers as the tax deducted within the fund cannot be recovered. Apart from their ability to offer income flexibility the area where bonds can be particularly useful is in the field of Inheritance Tax planning since they can be written under trust.