Personal portfolio bond (PPB) meaning

A personal portfolio bond is a “self‑directed” insurance‑based investment: a life assurance policy, life annuity contract or capital redemption policy under which the policyholder (or a connected person) can choose, or influence the choice of, the underlying investments. In the UK (England & Wales, Scotland and Northern Ireland), “personal portfolio bond” is a statutory term in the personal portfolio bond rules within ITTOIA 2005, applied through the chargeable events regime. If a policy is a PPB, annual deemed chargeable event gains can arise for income tax purposes, regardless of actual investment performance. The legislation includes safe‑harbour lists of permitted assets; policies restricted to permitted assets are not PPBs. Life offices commonly draft conditions to avoid PPB status, and advisers review investment powers, connected‑person influence and asset menus to assess risk. HMRC guidance (IPTM) explains the regime’s operation. In Ireland, a closely related concept—personal portfolio life policy (PPLP)—is defined in the Taxes Consolidation Act 1997 and attracts specific exit tax consequences where policyholders can select assets. While terminology and tax outcomes differ, the practical focus across the UK and Ireland is whether investor choice over assets triggers anti‑avoidance charges.