Cash & Bonds Insurance (investment) bonds

Got a 404 for the second link and don't think the first link really speaks to this.

As far as I can tell (and it seems to me the only sane way to do it), the insurance company pay 30% tax on earnings and capital gains as one would expect a company to. If you have selected a low-turnover style option (e.g. large cap tracking fund) the yearly capital gains would be expected to be small, and no worse than an ETF or whatever, and most likely taken into account by the management so that they don't sell unless they think there's clear upside given the tax implications.

It is stated in numerous places that your final cash-out is CGT free, so I wouldn't expect to see an inexplicable 30% missing from your balance... happy to be proven wrong if something more conclusive turns up. Best I could find was a bunch of old wives arguing about it here:
How To Pay 0% CGT, outside super, with Vanguard: - Investing - Finance

Edit: Found something by somebody qualified sounding, seems to support what you have written but I am still not 100% clear...

The strategic fit of investment bonds - Part 1 | Macquarie

 

@BPhil thankyou so much for your patient response, and in particular that last article. Reading it closely, I'm not sure it actually supports what I have written at all. I think it supports what you initially said which is that it makes no sense at all for a fund to pay CGT unless the gains are realised. The article assumes a portfolio turnover of 20%, which crudely means that every five years it has sold all of its assets and realised a capital gain before purchasing more. If I instead chose to hold index funds within the investment bond (as opposed to an actively managed "balanced" portfolio) I suspect the true turnover amount would be far less than 20%, with a far lower "realised" capital gain to pay tax on. I hope I'm reading this right...