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Keydata plan uses capital gains allowance

Keydata is setting up a structured product offering investors higher than average returns by allowing them to take advantage of their capital gains tax allowances.

The five-year alternative income plan is linked to the FTSE 100 and is partially comprised of five bonds, with each bond maturing at 12-monthly intervals throughout the plan&#39s lifespan.

This structure gives an income of 5 per cent, which is net for most investors as they can use their capital gains allowance instead of incurring income tax.

The plan has a 50 per cent soft protection level and any losses thereafter will be on a one-for-one basis. The capital protection element of the plan will be backed by a financial institution with an AA rating from Standard & Poor&#39s.

Minimum investment is £5,000. Commission is 3 per cent. Due to structure constraints, the plan is not eligible for Pep or Isa investment.

Sales director Mark Owen says: “A product which helps investors to generate higher net returns on their savings by utilising their tax allowances must be good, especially in this historically low interest rate environment.”

Whitechurch Securities investment director Gavin Haynes says: “It offers a very attractive level of income and the structure is innovative as not many investors use their capital gains tax allowance.”

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