Education Bonds are increasing in popularity as a long-term, growth investment option. Education bonds are a tax-effective investment and saving vehicle that can be used to accumulate and distribute wealth and is particularly advantageous when used as an education fund.
A significant advantage of an Education Bond over an Investment bond is access to the Education Tax Benefit, meaning 30% of withdrawals for education costs are returned into the bond as education benefits. Further, if the bond is held to fund your child's or grandchild's education, the withdrawn income is assessable to them, not you. As well as being a protected asset from creditors, the estate planning benefits associated with education bonds mean education bonds are non-estate assets that sit outside the will and cannot be contested, protecting the funds for the nominated beneficiaries.
Education bonds are not just limited to use for education. Education Bonds have a tax-paid structure, potentially giving access to lower tax rates on the bond earnings. Additionally, contributions paid into the bond don't attract tax. Capital can also be accessed anytime for any purpose without creating a tax event.
For more information, click here or play the video below to watch Prosperity Director and Financial Adviser Hamish Landreth discuss education bonds with Dani Dy, Business Development Manager at Futurity Investment Group.
This communication contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Prosperity Wealth Advisers (ABN 32 141 396 376) is an authorised representative of Prosperity Wealth Advisory Services Pty Ltd, Australian Financial Services Licensee (533675).