Move to Dublin escapes review

Eurolife has launched a new income or growth plan which bypasses an Inland Revenue review of high-income bond taxation by using a Dublin-based company.

The Eurolife income or growth plan offers 10 per cent income or 30.25 per cent growth tax-free for Isa and Pep investors. Basic-rate taxpayers buying direct investments receive 9 per cent net income.

Direct investments of between £7,000 and £1m can be made or through an Isa and/or Pep transfer.

The plan promises 100 per cent capital return if the Eurostoxx 50 index, in which it invests, does not fall by more than 20 per cent between November 2000 and November 2003.

But capital is eroded if the index drops by more than 20 per cent in the initial measurement period during this time, with the return reduced by between 1 and 2 per cent for every 1 per cent fall.

The plan runs for three years and two months and matures on January 1, 2004.It is available until October 24.

Eurolife has sold around £400m worth of the bonds in the last five years, with many due to mature next year.

Group product development manager Philip Saunders says: “By using a closed- end company listed in Dublin we fall outside the scope of the review.”