Financial Planning Report

Prepared for:

Mr A Client & Mrs A Client

Prepared by:

Independent Financial Adviser

PPOL

Penylan Mill Coed-y-Go

Oswestry Shropshire

SY10 9AF

7/4/2015

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SUITABILITY REPORT

Introduction and Basis of Advice

I am authorised as an Independent Financial Adviser and I can confirm you have been provided with a copy of our Client Agreement, our Terms of Business, the services we offer and how we can be remunerated for these services.

My recommendations that follow are based on my understanding of your current financial position and objectives. The report should be read in conjunction with the relevant illustrations, fee disclosure and Key Features documents; I do stress that if you do not understand any of the information then please contact me as a matter of urgency.

Date of Client Agreement

Date of Last Meeting

31/3/2015 7/4/2015

I would also mention that if any information has not been disclosed, it is possible that my advice may not take account of all your personal requirements and could ultimately have been different.

Summary of Current Position & Objectives

Please find below a summary of your current position:

Name Mr A Client Mrs A Client

Date of Birth 1/1/65 1/1/67

Marital Status Married

Number of Financial Dependants 2

Occupation GP Nursery nurse

Employment Status Unemployed Employed

Tax Status Higher Rate Tax Payer Basic Rate Tax Payer

Monthly Net Income (£) 3500 1500

Monthly Expenditure(£) 3000 Joint

Total Assets (£) 500000 Joint

Total Liabilities (£) 100000 Joint

Smoker No No

State of Health Good Good

It was nice to meet with you both last week. Anne, you have inherited some money from a great aunt and you now have around £15,000 of surplus funds which you would like to invest for growth over the medium to longer term or for a 'rainy day' as you described it. You have an existing investment and you would also like to review this at the same time.

Alan, you have confirmed you are happy with your existing investments and do not wish to review or increase contributions to these.

You have specifically requested that I focus my advice on the following:

Wording can be permanently edited, removed or added as desired via PPOL’s unique

(RTE) Report Template Editor which will then make this text available for all future

reports

A review of Anne’s investment portfolio to ensure it is performing satisfactorily, is invested tax efficiently, and continues to meet your needs, objectives and risk profile

The investment of a lump sum for Anne to provide capital growth over the medium to long term

Investment Knowledge & Experience

We discussed your knowledge and experience of financial products and investments.

Mrs A Client (Anne)

You confirmed to me you have some knowledge and some previous experience of investing

Attitude to Risk

We discussed at some length your attitude to risk and in particular the relationship between risk and reward. The agreed risk profile is as follows.

You have completed the xxx SAMPLE xxx Risk Profiling Questionnaire. The questionnaire has been designed to assess your knowledge, experience, attitude towards investment risk and capacity for loss.

Your risk profile is summarised as follows:

Investment Attitude to Risk: Medium Risk

This category is for the investor requiring long term growth or high levels of income without offering any guarantees to capital. Values may fall as well as rise and the investor may not get back the amount invested. Investment in equities will predominantly be in the UK in well established larger companies across a broad diversification of industries. Investment in corporate bonds will be in non investment grade yielding higher levels of income but subject to risk of default and therefore capital loss. Commercial property is included in this band.

Capacity for Loss: Moderate

Your sensitivity to volatility is realistic and you recognise that markets fluctuate and that some short term volatility must be accepted in order to achieve your investment objectives. You have sufficient assets outside of your portfolio and an investment time horizon far enough in the future to withstand small to medium losses without any detrimental effect to your living standards. Your capacity to loss threshold would be no more than 20%.

If you feel that this does not accurately reflect your attitude to risk or capacity for loss please contact me as a matter of urgency.

A full summary of my company’s attitude to risk and capacity for loss definitions can be found in the appendix of this report.

The attitude to risk and capacity for loss

‘definitions’ can be defined during your license

set up and can also be edited when required

Review of Existing Investments

Further information concerning the following investments can be found in the Appendix of this report.

General Investment Account

Cofunds - FGTY5643 - Mrs A Client

Original Investment Date Invested Additions Withdrawals Total Invested Current Value Encashment Value

£20000 05/07/2009 £5000 £0 £25000 £34000 £34000

This investment is invested as follows:

Portfolio Description Objective Initial

Charge Annual Management

Charge Ongoing Charges

Figure Allocation

Model Portfolio A

xxxxxxxxx Growth 0.0% 1.46% 1.67% 100%

This portfolio’s underlying funds are as follows:

Model Portfolio A

Fund Description Objective Sector Fund

Rating Initial

Charge

Annual Management

Charge

Ongoing Charges Figure

Allocation

DEF fund xxxxxxxxxxx Growth Global Equity A 0.0% 1.45% 1.65% 50.00%

GHI fund xxxxxxxxxxx Growth Specialist B 0.0% 1.40% 1.59% 20.00%

JKL fund xxxxxxxxxx Growth Mixed

Investment 20-60% shares

A 0.0% 1.50% 1.75% 30.00%

Aggregate:

0% 1.46% 1.67% 100%

I have recommended that we instruct the surrender of units held within your investment and reinvest in a New Individual Savings Account (NISA) for the following reasons:

You have not used your NISA allowance for the current tax year and as you are a basic rate taxpayer, seamlessly moving your current holdings into a NISA will ensure your investment is maintained in a tax efficient wrapper.

This investment continues to reflect your risk profile The investment reflects the agreed investment approach I am satisfied with the performance of the investment strategy to date and have

recommended the strategy be continued within the new NISA I can confirm there will be no capital gains tax to pay on the surrender of units from your

investment

The following contribution will be made to the NISA.

Contributions Frequency

£15240 Single

The columns within each table are intuitive meaning

cells that have no data will be excluded from the report

The charges are automatically

aggregated, saving you time

Investments Recommendations

Investment Vehicle

Further information concerning the following investments can be found in the Appendix of this report.

I have recommended that you invest into a General Investment Account for the following reasons:

This investment provides access to the investment strategy agreed It will provide the potential for capital growth You wish to make full use of the reliefs and allowances available to you to minimise the

amount of tax you pay It is very flexible in that there is typically no fixed term of investment. You can make an

additional contribution or withdraw funds at any time without penalty as per your requirements

Any gain can be offset against your annual capital gains tax allowance on encashment

Recommendation Summary

I have recommended that the available monies be invested as follows:

Investec Wealth & Investment - General Investment Account - Mrs A Client

Initial Investment Date Invested Regular Investment Income

£15000 April 2015 n/a n/a

I am recommending the above for the following reasons:

Investec Wealth & Investment is a wholly owned subsidiary of Investec PLC whose assets under management totalled £47.1bn as at 31st March 2014.

They have a good track record with the proposed investment strategy The research undertaken of the market place has identified this as being the most suitable

solution for your needs and objectives They have provided us and our clients with an excellent service in the past

Investment Strategy - Structured Products

A structured product is an investment backed by a significant counterparty (or counterparties) where the returns are defined by reference to a defined underlying measurement and returned at a defined date.

Structured Deposits - Are similar to a fixed-term deposit account, but instead of interest being earned at a set or variable rate, the interest is fixed and is reliant on the performance of the underlying asset.

Multiple ‘Investment

Vehicles’ can be intuitively

merged into one section

avoiding repetition

Investment Strategies now includes the

ability to recommend ‘Structured Products’

Type Growth

Strike Date 30/04/2015

Counterparty Example

Counterparty's Credit Rating AA rated by Standard & Poors

Underlying Assets Type Market Indices

End Date 30/04/2017

Credit ratings are the most common form of credit assessment and are used by investors of all levels of financial sophistication. However, it is important to realise that they are not completely infallible and could wrongly assess the stability of an institution.

The plan features which will determine the potential growth and what you could get back are detailed as follows:

Product Structure

The structured product features:

The known return on this investment is 15% over 3 years (at maturity) providing the relevant Market Index does not fall lower than 25% of its level as at the strike date.

Capital Protection Barrier (End of Term) – If the value of the underlying asset is 25% below its initial value at maturity then you will get back less than you invested

I have recommended the above for the following reasons:

I confirm that this level of ‘conditional’ capital protection is commensurate with your investment objectives and your capacity to absorb any capital loss

The potential for investment growth is provided even if market conditions are not conducive to growth

The company provider uses a highly rated and financially strong counterparty

Further Information and Risk Warnings

Further information regarding the recommended investment can be found in the Key Features Document provided and the Appendix of this report. A summary of the risk warnings associated with my recommendations can also be found in the Appendix of this report.

Alternative Solutions Considered But Discounted

I confirm due consideration was given to a range of alternative solutions but subsequently discounted for the following reasons:

National Savings & Investments

The returns available are less than expected for the guarantees provided

New Individual Savings Account (NISA)

Your allowance is being used via your existing GIA investment with Cofunds via a BED & NISA transaction.

Pension Planning Product

You wish to have access before age 55

Investment Trust

Initial and on-going charges are generally greater (typically the initial and annual management charge incurred would be 3 to 5% and 1 to 1.5% respectively)

Exchange Traded Product

You felt the potential returns would be greater elsewhere

Onshore Investment Bond

They are not as tax efficient given your circumstances

Offshore Investment Bond

The charges associated with an offshore investment tend to be greater

Unregulated Collective Investment Scheme (UCIS)

You are not a certified sophisticated or experienced investor

Non Mainstream Pooled Investment (NMPI)

These investments are not covered by the FSCS

Enterprise Investment Scheme (EIS)

The tax advantages are not guaranteed and remain dependent on the qualifying status of the underlying holdings

Venture Capital Trust

VCTs often have poor liquidity due to the volume of traded shares being low

Important Information

Cost of Services

A summary of how my company can be remunerated for the advice received and the provision of my services is detailed in the disclosure documentation provided.

Our Service Proposition

My company offers a number of service propositions which govern the type of service and the regularity of contact and reviews you will experience. The ongoing servicing of your plans is recommended but not compulsory and if taken up can be cancelled at any time. The associated costs of our propositions and when they commence are set out in our disclosure documentation already provided and these costs may go up or down in line with the fluctuating value of the underlying assets. I confirm that you have elected for the following service:

A focused and limited advice transaction service instigated by client request.

Charges Summary

General Investment Account - Cofunds FGTY5643 - Mrs A Client

Ongoing Charges

Adviser Charge AC Paid By Investment Management Fee

0.25% per annum Provider 1.67% per annum

Proposed General Investment Account - Investec Wealth & Investment - Mrs A Client

Entry Charges Ongoing Charges Exit Charges

Adviser Charge AC Paid By Adviser Charge Exit Charge

£350 fixed fee Provider not applicable Yes - Variable dependant on proximity to maturity

Entry Charges: One off charges taken before or on investment.

Adviser Charge: A fee paid to the adviser for advice and services.

AC Paid By Provider: The Adviser Charge will be facilitated by the product provider but taken from your funds.

Ongoing Charges: Regular charges, typically taken over a year.

Adviser Charge: A fee paid to the adviser for ongoing advice and services.

AC Paid By Provider: The Adviser Charge will be facilitated by the product provider but taken from your funds.

Investment Management Fee: Or Annual Management Charge (AMC). A fee levied by the investment firm paid out of the fund for the costs of investment management and fund administration.

A summary of the charges

will be included in one place

as per the FCA’s directives

Exit Charges: One off fees taken on termination.

Exit Charge: Applicable under the plan or investment rules following early sale, surrender, encashment or transfer.

Cancellation Notice

Once your investment plan is set up you have a legal right to cancel should you change your mind, the period is generally 30 days (which may reduce to 14 days for NISA and Unit Trust investments and may increase to 60 days for annuities). The amount you get back may be reduced by a decrease in value between making your initial investment and up until your investment is sold.

Affordability & Emergency Fund

You should keep some money immediately accessible to cover any unforeseen emergency expenditure that may arise. I would normally recommend that you retain an emergency fund equal to three month's expenditure within an immediate access deposit account as a bare minimum. I confirm you are happy with the level of your emergency reserve. I would also like to take this opportunity to confirm that the above recommendations are affordable to you.

Financial Services Compensation Scheme (‘FSCS’)

The FSCS was set up under the Financial Services and Markets Act 2000 and exists to protect clients of FCA authorised firms and covers deposits, insurance and investments. The scheme can pay compensation to clients who have lost money as a result of their dealings with FCA authorised firms that are unable to pay claims against them.

For investments the compensation limit is £50,000 and for deposit based accounts it is £85,000.

Structured Deposits investments are protected up to £85,000 per person. Please note if you have deposits with the same deposit taker group in excess of £85,000 you will not be covered for the excess.

Aspects of Your Financial Affairs Not Addressed But Deemed Important

I practice a comprehensive approach to financial planning. To this end, I would like to draw your attention to the following. If on further consideration you wish to discuss any of the below in more detail please do not hesitate to contact me.

Wills and Lasting Power of Attorney

I understand you have made a Will. I do stress the importance of keeping your Will up to date, thereby ensuring your estate passes in accordance with your wishes.

I understand that you already have a Lasting Power of Attorney (LPA) in place

INTUTIVE WIZARD – The FSCS

wording is created to reflect the product

and / or investment strategy selected

Confirmation

I have identified your objectives and I hope you agree that the recommendations made correspond to your current needs and future requirements. If you have any queries concerning the content of this report, or should you feel the recommendations are in any way an inaccurate reflection of your circumstances and future objectives please contact me immediately.

Report written by

Signature __________________________ Date ____/____/____

We the undersigned have received this report. We acknowledge this is a fair reflection of our conversation and confirm we have received all supporting literature including Key Features Documents, fund fact sheets and illustrations.

Accepted by Mr A Client and Mrs A Client

Signature __________________________ Date ____/____/____

Signature __________________________ Date ____/____/____

APPENDIX

The latest ‘Risk Warnings’, ‘Notes on Financial

Products’ and where applicable ‘Technical

Notes’ will automatically pull through to the

Appendix section of the report

Attitude to Risk

My company classifies Investment Attitude to Risk as follows:

Low Risk

This category is appropriate where the investor requires high security. The investments are cash deposit or similar ranging from the immediate access to a term deposit which may be subject to penalty if not held to the full term. Emergency fund/cash reserve would typically be included in this category.

Low / Medium Risk

This category is for investments where there may be some fluctuation including loss in value over short and medium term. Where there is exposure to equities, this is usually limited to around 60%. Any investment in corporate bonds will primarily be large capitalised companies of investment grade status.

Medium Risk

This category is for the investor requiring long term growth or high levels of income without offering any guarantees to capital. Values may fall as well as rise and the investor may not get back the amount invested. Investment in equities will predominantly be in the UK in well established larger companies across a broad diversification of industries. Investment in corporate bonds will be in non investment grade yielding higher levels of income but subject to risk of default and therefore capital loss. Commercial property is included in this band.

Medium / High Risk

This category is for the investor requiring long-term growth which is inevitably balanced by the risk of short/medium term losses. Investment is almost exclusively in equities across a broad range of sectors and will include exposure to smaller UK companies as well as overseas companies largely in Europe and the USA where there is the additional currency risk.

High Risk

This category is for the adventurous investor who already has a diversified portfolio and wishes to expose a relatively small portion to high risk investment. Capital could be subject to partial or total loss. Investments will include direct investment, Specialist Sector and Emerging Market funds as well as the Far East which are all prone to high volatility and potential loss. It will also include more obscure products, many of which are tax driven which are only suitable for the sophisticated investor.

My company classifies Capacity for Loss as follows:

None

Your sensitivity to volatility is realistic and you recognise that markets fluctuate, however your investment time horizon and financial circumstances dictate that no short-term volatility can be

accepted within your investment portfolio as any falls in value would detrimentally affect your standard of living. Your capacity to loss threshold would be 0%.

Low

Your sensitivity to volatility is realistic and you recognise that markets fluctuate, however your investment time horizon and financial circumstances dictate that only minor short-term volatility can be accepted within your portfolio before your standard of living becomes adversely affected. Your capacity to loss threshold would be no more than 10%.

Moderate

Your sensitivity to volatility is realistic and you recognise that markets fluctuate and that some short term volatility must be accepted in order to achieve your investment objectives. You have sufficient assets outside of your portfolio and an investment time horizon far enough in the future to withstand small to medium losses without any detrimental effect to your living standards. Your capacity to loss threshold would be no more than 20%.

High

Your sensitivity to volatility is realistic and you recognise that markets fluctuate and that volatility must be accepted in order to achieve your investment objectives. You have a high net worth, with available savings, a reliable income, other accessible assets, low debt and a sufficient investment time horizon to manage medium to large losses in your portfolio without a detrimental effect to your living standards. Your capacity to loss threshold would be no more than 30%.

Unlimited

Your sensitivity to volatility is realistic and you recognise that markets fluctuate and that volatility must be accepted in order to achieve your investment objectives. Large losses in your portfolio would have a low impact on your future lifestyle as you are financially independent of the monies set aside. Your capacity to loss threshold has no limit.

Risk Warnings – General Investment Accounts

In addition to the risks shown below, I recommend you read carefully the section entitled “risk factors” in the Key Features Document provided.

This investment should be considered for the medium to long-term and should not be entered into if you envisage withdrawing your capital before this time.

The value of the investment is determined by the value of the units, the price of which can fall as well as rise. The overall value of the investment is therefore not guaranteed and you might get back less than you originally invested, especially in the early years.

For a full explanation of the charges and how they affect your plan, please refer to your personalised illustration and Key Features Documents.

The figures on any quotations provided are for illustration purposes only and are not guaranteed.

Past performance is no guarantee of future returns. The recommendations are based on current taxation, law and practice and the current legal

and administrational framework and are based on my current interpretation and understanding of those, all of which may be subject to change.

Please note the later encashment of a General Investment Account could give rise to a capital gains tax charge.

Where an income is being drawn immediately, you should be aware that this could have the effect of eroding the initial value of the capital invested.

Investing solely in a particular sector or otherwise having an investment plan with a narrow focus may be more risky than investing across a broad range.

Please bear in mind that the outlook for market sectors can change, certain asset classes and funds will perform better than others and as a result your asset allocation will become unbalanced over time.

Fund or funds may have a higher risk rating than your overall stated attitude to risk. If this is the case, then the overall risk rating applied to the combined funds being recommended is designed to meet your stated risk profile.

Where a property fund has been recommended you should be aware property and land can be difficult to sell – so you may not be able to cash-in this investment when you want to.

Where a corporate bonds has been recommended you should be aware in adverse market conditions the fund may be difficult to sell.

Where a fund invests in overseas markets, changes in currency exchange rates mean that the value of the investment can go up or down.

Risk Warnings – New Individual Savings Account (NISA)

In addition to the risks shown below, I recommend you read carefully the section entitled “risk factors” in the Key Features Document provided.

This investment should be considered for the medium to long-term and should not be entered into if you envisage withdrawing your capital before this time.

The value of the investment is determined by the value of the units, the price of which can fall as well as rise. The overall value of the investment is therefore not guaranteed and you might get back less than you originally invested, especially in the early years.

For a full explanation of the charges and how they affect your plan, please refer to your personalised illustration and Key Features Documents.

The figures on any quotations provided are for illustration purposes only and are not guaranteed.

Past performance is no guarantee of future returns. The recommendations are based on current taxation, law and practice and the current legal

and administrational framework and are based on my current interpretation and understanding of those, all of which may be subject to change.

The favourable tax treatment of NISAs and your personal circumstances may change over the period of investment and could affect the benefits you derive from them.

Where an income is being drawn immediately, you should be aware that this could have the effect of eroding the initial value of the capital invested.

Investing solely in a particular sector or otherwise having an investment plan with a narrow focus may be more risky than investing across a broad range.

Please bear in mind that the outlook for market sectors can change, certain asset classes and funds will perform better than others and as a result your asset allocation will become unbalanced over time.

Fund or funds may have a higher risk rating than your overall stated attitude to risk. If this is the case, then the overall risk rating applied to the combined funds being recommended is designed to meet your stated risk profile.

Where a property fund has been recommended you should be aware property and land can be difficult to sell – so you may not be able to cash-in this investment when you want to.

Where a corporate bonds has been recommended you should be aware in adverse market conditions the fund may be difficult to sell.

Where a fund invests in overseas markets, changes in currency exchange rates mean that the value of the investment can go up or down.

Risk Warnings – Structured Products

In addition to the risks shown below, I recommend you read carefully the section entitled “Risk Factors” in the Plan Documentation provided which highlights any possible disadvantages of affecting this plan.

Any “structured product’’ should be considered for the term of the plan and should not be entered into if you envisage withdrawing your capital before this time.

For a full explanation of the charges and how they affect your plan, please refer to your personalised illustration (where applicable) and plan documentation.

The figures on any quotations provided are for illustration purposes only and are not guaranteed.

The recommendations are based on current taxation, law and practice and the current legal and administrational framework and are based on my current interpretation and understanding of those, all of which may be subject to change.

Your circumstances may change, which may force you to sell your investment early. This may result in you getting back less than you originally invested.

Any growth or income produced by this investment is ultimately linked to the performance of the underlying indices, equities, currencies, commodities or interest rates which might turn out to be disappointing over the selected period.

Past performance of any structured product should not be seen as an indication of future performance.

The guarantees associated with this type of investment have an associated cost which will be reflected in the overall return achieved.

The tax position on maturity might not be advantageous to you at the time. If you redeem your structured deposit before the end of the stated terms, you may get back

less than the amount you originally deposited. Over the investment term, inflation will reduce the real value of your initial capital if no

additional investment return is received at maturity. Whilst capital protection is available on certain plans irrespective of the underlying asset(s)

performance, this protection is still at risk if the Counterparty / Issuer fail. The relevant index or indices, basket of shares, commodities, currencies and interest rates

can all fall as well as rise, and past performance must not be seen as an indication of future performance.

The fixed start and end dates mean you cannot time the market and the levels of the underlying assets at their observation dates may not be entirely favourable.

For plans using a market index or indices or basket of individual shares as the underlying asset, you will not receive dividends from the participating companies and the returns could be lower than if you invested directly in the individual shares of companies.

Structured deposit plans are not the same as deposit accounts and should be viewed as a higher risk level of investment.

Structured products carry early exit penalties or barriers to exit and you should take these into account before investing.

Technical Notes – Capital Gains Tax

Capital Gains Tax (CGT) is chargeable on the gains arising from the disposal of certain assets made by UK residents or ordinary residents in any one tax year. The tax is charged at a flat rate of 18% for lower and middle income tax payers and 28% for higher and additional rate tax payers. In essence this means that the rate of capital gains tax is 18% where the individual's net taxable gains plus their taxable income are less than the income tax basic rate threshold. The 28% rate applies to gains, or parts of gains, that exceed that limit. Entrepreneur's relief is paid at 10%, with a lifetime limit of £10m per person, and applies to the disposal of qualifying business assets by individuals and certain trustees.

How is capital gains tax calculated?

The gain is calculated by subtracting the disposal price from the purchase price. Having calculated all of the individual gains, these are totalled and offset against any losses made in the same tax year (or that have been elected to be carried forward), thus arriving at a net chargeable gain. If the net chargeable gain is less than the CGT Allowance (£11,100 for the 2015/16 tax year) there will be no tax to pay.

Please note

A husband and wife each have their own annual CGT allowance and their tax is calculated separately.

Any unused income tax personal allowance cannot be used against capital gains tax. The annual exemption cannot be rolled forward to the next tax year if it is not used.

What assets are exempt?

Not all assets are chargeable to capital gains tax. The most notable exempt assets are as follows:

Cash investments, National Savings Certificates and Premium Bonds Investment Bonds & Gilts Endowments and Friendly Society Plans NISAs Main residences Shares in Venture Capital Trusts Employee shareholding disposals for those with ‘employee shareholder’ employment status

(up to £50k in value at point of sale as from 1st Sept 2013)

Capital Gains Tax Planning Tools

There are a number of ways of reducing a potential capital gains tax bill, including the following:

Make use of all losses from previous years. Make use of annual exemptions. Make use of spouse’s annual exemption and lower tax bands. The transfer of assets

between spouses has no capital gains tax implications.

Notes on Financial Products

New Individual Savings Account

You can only invest into a NISA (formerly known as ISA) if you are resident and ordinarily resident in the UK for tax purposes. The main benefits of a NISA are their tax efficiency, their accessibility (although some accounts have a notice period) and on death, the fund can be inherited by a spouse or civil partner via an additional NISA. This additional allowance will be eligible to the spouse to use on top of their own allowance for all future tax years.

A maximum of £15,240 can be contributed in the current tax year and saved as cash, stocks and shares or any combination of the two. The NISA allowance will increase in line with CPI on an annual basis.

Taxation

You pay no tax on any of the income you receive from your NISA savings and investments. This includes dividends, interest and bonuses. You also pay no tax on capital gains arising on your NISA investments (however losses cannot be offset against other capital gains outside your NISA).

General Investment Account

General Investment Accounts (GIAs) is a term given to investments which can hold assets but which are not allocated to a specific tax wrapper. GIAs can be owned individually or in joint names and can offer the investor a wide spread of investment risk within a professionally managed environment. Numerous categories of investments can be held within a GIA including collective style investments such as Unit Trusts, OEICs, Investment Trusts and Exchange Traded Funds (ETFs) and more tailored investments such as structured products.

Taxation

Dividend Distributions - are paid with an attaching 10% tax credit. This satisfies the liability of basic rate taxpayers. The tax credit is not reclaimable by non-taxpayers. Higher rate and additional rate taxpayers will have a further liability of 22.5% and 27.5% respectively of the gross distribution due, via their self-assessment tax return.

Interest Distributions - are paid net of 20% tax. This satisfies the liability of basic rate taxpayers. Non-taxpayers can reclaim the whole 20% deducted. Higher rate and additional rate taxpayers will have a further liability of 20% and 25% respectively of the gross distribution due via their self-assessment tax return.

Investment Platform Rebates - part of the investor’s annual management charge could be returned to them in the form of cash or unit ‘rebates’. These rebates will cease altogether from 6th April 2016, however where they are currently paid, HMRC has confirmed they are annual payments from the fund and unless paid from a NISA or pension are subject to income tax. Basic rate income tax at 20% will therefore be deducted with higher and additional rate taxpayers incurring a further tax liability through their self-assessment tax return.

Capital Gains Tax – will be subject to taxation at a flat rate of 18% for non and basic rate tax payers and 28% for higher and additional rate tax payers. However every individual has an annual capital gains tax allowance that can be offset against the gains.

Structured Products

A structured product is a tailor-made investment composed of several elements or component parts, each providing a specific exposure or protection for the investor. The typical characteristics of a product are:

Capital Protection - which is provided by the bond or bond-like element and is designed to pay the investor back some or all of the original investment (dependent on the level of capital protection selected)

Defined Return - provided by the financial option. The option is a financial instrument that pays a pre-defined amount, either a fixed amount or an amount calculated by reference to the change in an underlying asset.

Restricted Liquidity (or ability to buy and sell freely) - This means that structured products in practice may only be sold back to the issuer.

Structured products provide exposure to equity and other market types (e.g. interest rates, commodities, exchange rates or inflation) whilst controlling risk, because the returns are clearly defined. For example, investors who wish to gain from growth in stock markets, but who are worried about their investment losing value when the market falls, can buy a structured product that gives some of the upside returns of the stock market, without the risk of losing their investment in a stock market downturn.

Other investors may wish to take more risk in order to get higher returns, and may choose a structured product with partial, or conditional, capital protection. It is important to realize that the capital protection of a structured product is dependent on two factors: holding the investment until its maturity (the end of the investment term), and the credit-worthiness of the issuer, or of the entity that guarantees the issuer.

Structured Product will be dependent upon the solvency of the counterparty. The counterparty is usually a bank and if it fails, the Structured Product could become worthless.

Should you need to cash in your plan, it may be possible to do this via a secondary market, although a buyer will need to be identified and the amount you receive may be subject the following:

Bid/offer spreads The level of the underlying index or asset Market or asset volatility Interest rates The time left to maturity

If a secondary market is not available then the issuer may offer to repurchase at a given price but either way there will be an element of liquidity risk and the potential to incur a capital loss even with full capital protection.

Taxation

The amount of tax you pay and the value of any reliefs will depend on individual circumstances and the tax wrapper in which you invest. By investing directly into structured products (not via an NISA or a NISA transfer) you may be liable for Income Tax at your marginal rates or Capital Gains Tax at 18% or 28% currently. If the latter, any capital gains can be offset against your individual allowance. By investing within structured products via pension plans, such as SIPP and SSAS schemes, any returns will be free of tax within such pension arrangements.

If you invest via a NISA all investment returns from your plan are currently free of income tax and capital gains tax. You can invest your full allowance into a Structured Product and existing NISA holdings can be transferred into these products also. All transferred accounts will remain sheltered from any income or capital gains tax.