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Nvesta offers unique solution

Structured product provider Nvesta has established the Safety Net Income Plan, a capital-protected bond that provides income over a five-year term.

The plan provides income of 5 per cent a year net of basic rate tax, which is the equivalent of 6.25 per cent gross for basic rate tax payers and 8.15 per cent gross for higher rate tax payers.

In addition, investors will get a full capital return plus 1.25 per cent provided the FTSE 100 index does not fall by more than 50 per cent during the term. Even if it does, investors will get their capital in full if the final index level is above the initial level. If it is below the initial level, investors will lose 1 per cent of capital for every 1 per cent fall in the index.

Nvesta says this product is different to other income-producing investments because the annual income tax liability is deferred until the plan matures in 2009. At maturity, investors can use their annual Capital Gains Tax Allowance which should mean most investors have little or no tax liability.

To do this, the product must offer an element of growth, which is why investors get a 1.25 per cent return above their original capital as well as income at maturity. The structure of the product means that the annual income is provided by 21.5 going into a deposit, while the remaining 78.5 per cent of the capital is invested in a zero coupon bond. This element will grow to 101.25 per cent, enabling investors to offset the gain against their CGT allowance.

This plan is unique at the moment as there are no other structured products designed purely for income, although Keydata is planning something similar without the ability to offset proceeds against CGT allowance so income tax liabilities may apply. However, people who take out income-producing structured products stand to lose their capital if the index does not perform well, so they would not be suitable for all income seekers.


Millfield appoints new Board member

Millfield Group has appointed Mike Walmsley to the board as non-executive director. Walmsley, 62, is currently operations director of Polestar, the largest printer in the UK. Millfield has also announced the appointment of Darrell Smith as sales director for the North. Millfield now has six executive and two non-executive directors.

Protection sector is hit by plunges in CI and IP sales

The protection market has seen a significant drop in individual critical-illness cover and income protection sales of 8.7 per cent and 11.8 per cent respectively last year, says the Swiss Re protection market report. The report, Term & Health Watch, cites several reasons for the fall in sales. A major factor is the hardening of […]

Pinder Fry & Benjamin – Gold 9

Type:Exempt unit trust Aim: Growth by investing in Ernst & Young&#39s Central London office Minimum investment: Lump sum £25,000 Investment split: 100% in a commercial property Place of registration: Dublin Closing date: July 14, 2004 Charges: Initial 4.96% Commission: Initial 1.75% Tel: 020 7291 7700

Four more for LIA board

The LIA has appointed four more members to its Board of Directors. Mark Ommanney, John Ellis, Andrew Clarke and Peter Williams have joined the Board as Director General, Public Affairs Director, Finance Director and Director respectively. The move takes the number of Board Members from eight to 12 and is designed to strengthen the LIA&#39s […]

Benefits - thumbnail

Global benefits predictions for 2015 from Jelf International

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.


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