Key features of your SPANISH COLLECTIVE INVESTMENT BOND

Transcription

1 Key features of your SPANISH COLLECTIVE INVESTMENT BOND The Financial Conduct Authority is a financial services regulator. It requires us, Old Mutual International Ireland dac, to give you this important information to help you decide whether investing in our Spanish Collective Investment Bond is right for you. You should read this document carefully so you understand what you are buying and then keep it safe for future reference.

2 Contents at a glance ABOUT US 4 Old Mutual International Ireland 4 Enabling intelligent investment choice 4 AIMS 5 The benefits of investing in a Spanish Collective Investment Bond YOUR COMMITMENT 6 What you have to do as the investor RISKS 7 Factors that could affect your bond s performance QUESTIONS AND ANSWERS 8 Q1. Could the Spanish Collective Investment Bond be right for me? 9 Q2. Is my money guaranteed? 9 Q3. What might I get back? 9 Q4. What funds can I choose from? 10 Q5. Can I change my fund choice? 10 Q6. What are Key Information Documents (KIDs) and Key Investor Information Documents (KIIDs)? 10 Q7. What currency flexibility does my Spanish Collective 11 Investment Bond offer? Q8. Where can I find out about the charges? 11 Q9. How will I know how my Spanish Collective Investment 12 Bond is doing? Q10. Can I take money out? 13 Q11. How can I make payments? 13 Q12. What happens to my Spanish Collective Investment 14 Bond if I die? Q13. What about tax? 14 Q14. Can I put my bond into a trust? 16 Q15. Can I change my mind? 16 OTHER INFORMATION 17 Contact details 17 Complaint procedures 17 About the policy terms 18 Stability and security 18 Compensation and investor protection 19 2

3 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND PLEASE READ THIS DOCUMENT CAREFULLY The purpose of this Key Features Document is to give you a clear and balanced summary of the information you need to help you make a decision about investing in a Spanish Collective Investment Bond. Reading financial literature can be daunting, so we try to make our brochures and other documents as clear as possible, with no small print. If technical expressions are unavoidable, we also include an explanation in plain English. We test our literature regularly to make sure that it can be understood by our customers. Please read this Key Features Document in conjunction with your personal Key Features Illustration. We look forward to welcoming you as an Old Mutual International Ireland customer. All references to Old Mutual International Ireland, we, us and our in this brochure refer to Old Mutual International Ireland dac, who is the provider of the Spanish Collective Investment Bond. The value of investments and the income from them can go down as well as up. You may not get back as much as you invest. This document is based on Old Mutual International s interpretation of the law and HM Revenue and Customs tax practice as at July We believe this interpretation is correct, but cannot guarantee it. Tax relief and the tax treatment of investments may change. 3

4 ABOUT US Old Mutual INTERNATIONAL IRELAND The Spanish Collective Investment Bond is provided by Old Mutual International Ireland dac (Old Mutual International Ireland) an EU authorised life assurance company. Old Mutual International is part of Quilter, a leading provider of advice, investments and wealth management both in the UK and internationally, managing billion of investments on behalf of over 900,000 customers (as at 31 March 2018). ENABLING INTELLIGENT INVESTMENT CHOICE We don t sell or promote our products directly to customers. Instead we deal only through financial advisers. We believe that decisions about your financial future are so important that you should always seek expert financial advice. We do all we can to make sure that people who are advising fully understand our products and the risks they need to consider with their customers. We also try to make our product information as clear as possible in order to ensure you have all the information you need to make an intelligent investment choice. 4

5 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND AIMS THE BENEFITS OF INVESTING IN A SPANISH COLLECTIVE INVESTMENT BOND The Spanish Collective Investment Bond aims to provide a flexible method of investing your money with the potential for growth over the medium to long term. It is designed to allow your capital to grow and to offer you the option to take regular withdrawals. With the Spanish Collective Investment Bond you can enjoy significant investment freedom by spreading and varying your investments across a wide range of external funds (which are listed in the Spanish Collective Investment Bond fund list), according to your financial goals and your attitude to risk. The Spanish Collective Investment Bond is set up on a life assurance basis. As a life assurance bond it has one or more lives assured, which means the bond will come to an end when the person(s) whose life is covered by the bond dies. With the Spanish Collective Investment Bond you have a choice of having one, two or more lives assured, to ensure the continuity of your bond. Where there is more than one life assured, the bond will end when the last person whose life is assured dies. We will pay a death benefit of 101% of the encashment value after we have been notified of the death of the last life assured. The Spanish Collective Investment Bond may offer the opportunity to take advantage of several tax benefits, including arrangements that can help to reduce your inheritance tax (IHT) liability. Your financial adviser will have discussed the tax issues that are relevant to you. The Spanish Collective Investment Bond enables you to: choose from many tax-efficient funds to match your investment objectives transfer and consolidate your existing fund holdings into your bond (subject to our acceptance and them being on the fund list) giving you the convenience of holding all your funds in one portfolio easily switch funds within your bond without any tax have easy access to your money, either through tax-efficient regular withdrawals of up to 5% a year of your original investment, if UK resident, or through one-off payments cash in the whole or part of your bond whenever you wish. DEFINITIONS Policy your bond will consist of a number of policies and your premium will be spread equally across the number of policies you choose. The benefit of having more than one policy is to enhance the flexibility from a UK tax point of view when you cash in or withdraw money from your bond. We will automatically issue one policy if you have left the box for the number of policies in the application form blank. surrender value this is the amount of money you receive when you choose to cash in your bond, after any outstanding charges have been deducted. This is also sometimes referred to as an encashment value. 5

6 YOUR COMMITMENT WHAT YOU HAVE TO DO AS THE INVESTOR You should satisfy yourself that you understand the features and risks of investing in the Spanish Collective Investment Bond so that you can decide whether it is likely to meet your needs and expectations in terms of flexibility, capital growth and taxation planning. You must invest an initial sum of at least 37,500/ 25,000 (or other currency equivalent). You need to choose the fund or funds in which to invest your money. Your financial adviser can help you decide which funds are appropriate. To ensure that your Spanish Collective Investment Bond and chosen funds continue to meet your needs, you should monitor their performance regularly, consider new funds that become available, and make whatever changes (fund switches) may be necessary. Your financial adviser will be able to help you with this. CASH HOLDING We strongly recommend you maintain a cash holding of 5% of your total investment in the transaction account in your chosen bond currency so that money is readily available to meet charges. If there is insufficient cash in your bond to meet charges then we have the right to sell investments in line with the Policy Terms and Conditions (available from your financial adviser). Because the Spanish Collective Investment Bond is designed to be a medium to long-term investment, you should aim to hold it for at least 5-10 years. You can cash it in earlier, but there may be charges for doing so and you may get back less than you invested. You will also need to keep us informed of any future change of address or contact details so we can continue to keep in touch with you. Our contact details are on page 17. GO ONLINE Go online now to find out more about the Spanish Collective Investment Bond REGISTER ONLINE When you become a policyholder you can monitor your investment simply and conveniently by registering for our online service Wealth Interactive. 6

7 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND RISKS FACTORS THAT COULD AFFECT YOUR BOND S PERFORMANCE All types of investment involve some risk. The Spanish Collective Investment Bond gives you access to a wide variety of investment funds, the value of which may fall as well as rise. You accept this investment risk by taking out this bond. This means that we cannot guarantee the amount you get back when you cash in your bond. It may be less than indicated in your personal Key Features Illustration, or less than you invested, for the following reasons. CHOICE OF ASSETS The funds available all have specific objectives and associated risks. These differ according to the assets held within them. For example, if you choose emerging market funds that are invested in parts of the world with less well-established economies, their value could be subject to considerable price changes known as volatility. Similarly some funds, such as those investing in property, can be difficult to sell and you might not be able to sell or switch from such funds when you want. If you do not review the funds within your bond regularly and monitor their performance, they may fail to meet your expectations. If the funds in your bond do not match your attitude to risk (willingness to accept potential losses), they may not perform as you anticipate. Where a fund holds investments in a currency different to the one in which it is denominated and in which your bond is held, there may be additional risks because of exchange rate fluctuations. CHARGES AND WITHDRAWALS The effect of charges may be higher than illustrated. For example, you might decide to switch to funds with higher charges than those shown in your Key Features Illustration, or investment management costs may increase in the future. If you take greater regular withdrawals than originally planned, the value of your Spanish Collective Investment Bond may be less than shown in your Key Features Illustration. TAX CHANGES Tax rules could change in the future and may affect the amount available after taxation. CANCELLATION RISK If you decide to cancel your bond within the first 30 days, its value could fall over this time. If so you will get back less than you invested. If, at your request, we have facilitated the initial fee for advice given to you by your financial adviser and you decide to cancel your policy, we cannot reclaim or refund the fee. The fee agreement is between you and your financial adviser, not Old Mutual International Ireland, and it is up to you to reclaim the fee. The section Your commitment on page 6 will help you understand how you can reduce some of these risks. Please see page 19 for information on Compensation and investor protection in the unlikely event that Old Mutual International Ireland becomes insolvent. You can find out more about the risks in the Spanish Collective Investment Bond Key Information Document. Your financial adviser will provide you with this document. 7

8 8QUESTIONS AND ANSWERS

9 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND Q1. COULD THE SPANISH COLLECTIVE INVESTMENT BOND BE RIGHT FOR ME? You need to consider whether the Spanish Collective Investment Bond meets your needs. This could be the right investment for your needs if you are looking for investment growth and/or the facility of taking withdrawals, and you can afford to commit a minimum investment of 37,500/ 25,000 (or other currency equivalent) for at least 5-10 years. It involves more risk than bank or building society savings accounts, but the potential for growth is greater. If you already hold individual collective investment funds or unit trusts as described on page 10, and these are replicated in the Spanish Collective Investment Bond Fund List, then you might also want to consider using our asset transfer facility when applying for your Spanish Collective Investment Bond. This can make up part or all of your investment into your Spanish Collective Investment Bond. If you would like to know more about our asset transfer facility then we recommend you speak to your financial adviser. Please note that the minimum sum you can transfer is 75,000/ 50,000 (or other currency equivalent) and there is a minimum sum you can transfer per asset of 7,500/ 5,000. The Spanish Collective Investment Bond can be set up to continue after your death, for example to help with inheritance tax planning. As your attitude to risk and your financial objectives change, you can switch your fund choices accordingly. If you have any questions about the suitability of this bond, its features and the funds you are intending to invest in, we recommend you speak to your financial adviser. Q2. IS MY MONEY GUARANTEED? No, the value of your investment in the Spanish Collective Investment Bond can go down as well as up and you may not get back the amount invested. Q3. WHAT MIGHT I GET BACK? Your personal Key Features Illustration gives examples of what you might get back. The projections shown are based on a range of assumptions about future growth rates, none of which are guaranteed. The amount you get back will depend on: how much you have invested how long your premiums have been invested the investment performance of your chosen fund or funds how much you have previously withdrawn the charges that we have taken any tax due when you cash it in. 9

10 Q4. WHAT FUNDS CAN I CHOOSE FROM? You can choose from an extensive range of PRIIPs* compliant collective investment funds, Our Spanish Collective Investment Bond Fund List provides you a list of over 400 Spanish tax-compliant funds from many of the world s leading fund managers. Your financial adviser can help you choose the most suitable funds for your circumstances and needs. You can invest in as many funds as you wish, subject to a minimum of 3,750/ 2,500 (or other currency equivalent) in each holding. Please note that some fund managers may have a higher minimum investment requirement than Old Mutual International Ireland. Your financial adviser can provide you with details on this. You can get information about individual funds from your financial adviser. Your financial adviser can provide you with more details on the permitted investments. The value of all these funds can fall as well as rise and they could in exceptional circumstances become valueless either temporarily, because of suspension, or permanently. You accept this risk by choosing to invest in these funds. Please note that all underlying assets in the Spanish Collective Investment Bond are owned by Old Mutual International Ireland. All rights relating to these funds belong to Old Mutual International Ireland. We accept no responsibility for the investment performance of an investment. However, the value of your Spanish Collective Investment Bond, which you own, and the amount you get back will be directly linked to the performance of the funds you or your adviser have chosen. * PRIIPs refers to Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs). Q5. CAN I CHANGE MY FUND CHOICE? You can change your choice of funds whenever you wish. Most fund switches involve a dealing charge. You should review your choice of funds regularly and change them if your selection no longer meets your needs. Your adviser will be able to help you with this. DEFINITIONS Collective investments are arrangements where investors pool their assets and have them professionally managed by an independent manager. Typical examples in the UK are authorised unit trusts and open-ended investment companies (OEICs). Undertakings for collective investment in transferable securities (UCITS) are collective investment schemes, which must comply with the European UCITS Directive, ie regulations and administrative provisions relating to undertakings for collective investments in transferable securities. Fund management groups are investment management companies that employ the expertise of specialist fund managers to run their portfolio of funds on behalf of both private and institutional investors. Examples are Fidelity, Invesco Perpetual, BlackRock and Schroders as well as many others. Q6. WHAT ARE KEY INFORMATION DOCUMENTS (KIDs) AND KEY INVESTOR INFORMATION DOCUMENTS (KIIDs)? Key Information Documents and Key Investor Information Documents are issued by the fund manager, to give more comprehensive information about the way each fund works and its investment risks. Key Information Documents (KIDs), are being introduced gradually from January If no KID is available for a particular fund, the fund manager concerned will provide a Key Investor Information Document (KIID). Both documents present similar information but are based on two separate pieces of European legislation. To avoid confusion, KIDs will eventually replace all KIIDs by January The provision of a KID or KIID is a regulatory requirement if you are thinking of investing in a fund within an Spanish Collective Investment Bond. 10

11 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND Q7. WHAT CURRENCY FLEXIBILITY DOES MY SPANISH COLLECTIVE INVESTMENT BOND OFFER? With the Spanish Collective Investment Bond you can choose which currency you want for bond valuations and premium payments. You can also hold funds in different currencies: Bond currency your Spanish Collective Investment Bond investment can be held in any of the currencies listed in the application form. You can choose which currency you wish your bond valuations to be shown in on your valuations. This is known as the bond or policy currency. This is also the currency in which the deduction of bond charges or charges applying to fund switches, will be made. Please note that all fixed price charges OR non-percentage based charges are set in euro ( ) and converted to the bond currency using prevailing rates at the time of the charge. As such, charges may fluctuate on your bond if you choose a policy currency other than the euro ( ). Premium currency if you choose a bond currency other than that in which you make your investment payment, you should be aware that we will notionally convert your payment into your chosen bond currency. This means we will not physically convert the payment itself, just apply the converted amount to your bond. This currency conversion could expose you to exchange rate fluctuations. Any conversion that we make will be based on the closing market mid-rate* provided to us by a third-party currency rate provider on the date we receive your investment payment to our bank account. The converted investment payment will be the amount which is shown in your policy schedules. Base currency in addition to the above, your Spanish Collective Investment Bond can hold assets in different currencies, no matter what currency your Spanish Collective Investment Bond is held in. * all currencies have a market rate. Any provider dealing with currencies will independently set different buy and sell rates, which include overheads and profit margins. The market midrate is derived from the midpoint between buy and sell rates used in the global markets. Q8. WHERE CAN I FIND OUT ABOUT THE CHARGES? Your enclosed personal Key Features Illustration gives details of the charges made for managing your bond and the investments within it, how the charges are taken, and the effect they could have on the value of your bond. Full details about the charges that apply to your Spanish Collective Investment Bond will be confirmed in the charges schedule which will be sent to you, together with your policy documents, after your bond has started. One-off and regular charges applied to your Spanish Collective Investment Bond are used to pay: Old Mutual International Ireland, the provider of the bond, to cover the cost of setting it up and administering it the managers of the funds you have chosen to invest in, to cover their administrative costs (which are reflected in the unit prices) the charge for advice given by your financial adviser. We may increase these charges to reflect Irish inflation and if the administrative costs associated with your bond, or our own range of unit-linked funds within it, increase. Reasons could also include, but are not limited to, changes in taxation, regulation and the law. If we have to do this we will let you know*. * Due to the large number of external funds available for our policyholders to invest in, we are unable to monitor and notify our policyholders of any changes to external funds. We therefore recommend that a review of external funds forms part of your yearly review with your financial adviser. continued 11

12 EARLY WITHDRAWAL We make an early withdrawal charge under certain circumstances*. These include: if you fully cash in your bond if you cash in some of the policies in your bond if you take a withdrawal across all policies and the withdrawal results in less than 25% of your total investment remaining in your bond and its encashment value falls below 15,000/ 10,000 (or other currency equivalent) on death of the last life assured. * The actual amount and time frame of any early withdrawal charge will vary, as shown in the charging schedule. DEALING CHARGE If you want to switch funds this will in most cases be subject to a dealing charge, currently for each transaction. A switch consists of two transactions. Firstly you switch out of or sell holdings in the fund you are invested in. Secondly you switch into or buy holdings in the fund you wish to invest in. The total dealing charge would therefore be 49. You can find details about whether this charge applies to your bond in your personal Key Features Illustration. If you hold non-old Mutual International Ireland funds/assets there may also be third-party charges which apply, such as bank charges, which will be included in the net amount being switched. Q9. HOW WILL I KNOW HOW MY SPANISH COLLECTIVE INVESTMENT BOND IS DOING? The majority of funds you can invest in are priced daily. The value of your Spanish Collective Investment Bond is based on the total number of units you have in each fund. If the unit prices of the fund rise or fall, so will the value of your Spanish Collective Investment Bond. When you become a policyholder you will be able to register for our online service Wealth Interactive Here you can access: a summary view of all your Old Mutual International Ireland policies in one place personal valuations. If you do not have internet access, we will keep you regularly informed about the value of your Spanish Collective Investment Bond by sending a valuation statement each quarter. This shows the opening and closing value of your Spanish Investment Bond for each quarter, plus any investments made, benefits paid and the charges we have deducted. If you need additional valuation statements you can get these by asking your financial adviser for an update or by calling our valuation line on

13 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND Q10. CAN I TAKE MONEY OUT? REGULAR WITHDRAWALS If you are resident in the UK you can make withdrawals of up to 5% each year of the amount you have invested, without any immediate UK tax liability. You can take this payment monthly*, quarterly, half-yearly or yearly. The minimum withdrawal is 750/ 500. To meet regular withdrawals, unless you specify otherwise, we will partially cash in the policies which make up your bond. In this instance no early withdrawal charge will apply as long as the amount remaining in the bond after any withdrawals fulfils both of the following criteria: 25% of your total investment remains invested; and the encashment value exceeds 15,000/ 10,000 (or other currency equivalent). If you are a UK taxpayer and ask for a withdrawal of more than 5% a year, or withdraw over the years more than you have invested, this may make your withdrawal liable to income tax. * Please note that monthly withdrawals are only allowed if the initial investment is 150,000 or greater. If you are resident in Spain you can make withdrawals, but please refer to the document Tax and other important information for Spain ONE-OFF WITHDRAWALS OR FULL ENCASHMENT You can take one-off withdrawals or cash in your bond at any time by writing to us at our Administration Centre address. If you take one-off withdrawals we will partially cash in the policies which make up your bond unless you tell us otherwise. You should discuss the alternatives with your financial adviser. Please note you must enclose the policy documents if you want to cash in all the policies in your bond. We may not accept a one-off withdrawal request, or we may limit the amount available, if the value remaining in the Spanish Collective Investment Bond immediately after the withdrawal falls below the higher of 25% of your total investment or 15,000/ 10,000 (or other currency equivalent). You should also consider any tax implications. If you are resident in Spain you can make withdrawals, but please refer to the document Tax and other important information for Spain Q11. HOW CAN I MAKE PAYMENTS? You can make your payment either by cheque or electronic bank transfer in most major currencies, or by using our asset transfer or share exchange services. All cheques must be made payable to Old Mutual International Ireland dac*. If you wish to make an electronic bank transfer you can find full information on the banking details in the application form. You can add to your investment whenever you like by making further payments of at least 3,750/ 2,500 (or other currency equivalent). Please contact your financial adviser or write to us at our Administration Centre address. * Please note that cheque payments in currencies other than pound sterling ( ) may take longer to clear and some non-uk banks may apply high charges. 13

14 Q12. WHAT HAPPENS TO MY SPANISH COLLECTIVE INVESTMENT BOND IF THE LAST LIFE ASSURED DIES? The Spanish Collective Investment Bond can be set up to cover your own life ( single-life basis), yourself and one other person ( joint-life basis), or yourself and others ( multiple-life basis). You can also set it up to cover a life other than yourself ( life of another ). When the last person whose life is assured dies, we will pay out 101% of the encashment value of your bond. (So, if the encashment value of your bond at death is 200,000 for example, the total amount paid out will be 202,000.) Q13. WHAT ABOUT TAX? Taxation of the Spanish Collective Investment Bond The following information is based on our understanding of the current tax legislation although tax treatment will depend on your country of residence when you cash in your bond. The tax position of your bond may change in the future. You may be subject to additional taxes or costs which are not accounted for within the contract. Please contact your financial adviser for advice about tax liabilities. The following apply if you are a UK taxpayer You may withdraw up to 5% of your original investment (plus any additional investments) each policy year for 20 years, or, if you take less than 5% each policy year, until you have received 100% of the amount you have invested in your bond, without any immediate liability to income tax If you withdraw more than 5%, or take less than 5% each policy year and then withdraw over the years more than you invested, you may be liable to income tax When you finally cash in your bond, you may have to pay income tax on any gain you have made. This could also affect your right to certain benefits such as entitlement to children s tax credit Your bond is treated for tax purposes as though you had fully cashed it in just before the death of the relevant life assured You will not normally have to pay capital gains tax in connection with your bond. The following apply if you are a Spanish taxpayer Tax on Old Mutual International Ireland dac We are established in the Republic of Ireland and as such we are not liable to payment of Irish tax on income or capital gains attributable to our policyholder funds (including portfolio funds). There may be an amount of withholding tax on income, which cannot be reclaimed. 14

15 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND Tax-compliant collective funds Our contract is a life policy for personal income tax purposes. Please note that it is also necessary for the collective funds to be acceptable to the tax authorities if the life policy is to be tax advantaged. Therefore the funds are restricted to those listed in the Spanish Collective Investment Bond Fund List which forms part of the Terms and Conditions which govern the Policy. We will update the Spanish Collective Investment Fund List from time to time. Tax relief on premiums Premium payments are not eligible for tax relief. Tax on a policyholder beneficiary All gains on policy payments will be taxed at a flat rate of 19% effective from 1 January There will be no further personal income tax liability for the policyholder on the first 6,000 savings income received in a tax year. This also includes interest on savings accounts and dividends received in the same tax year. There will be a further 2% personal income tax liability which the policyholder will need to account for on the next 44,000 savings income and a further 2% personal income tax liability on savings income (including capital gains) above 50,000. Should there be a loss rather than a gain then the loss can be offset against other income tax liabilities. 1. Reporting of gains Any withheld tax is payable to the Spanish tax authorities by our tax representative in Spain, who will also submit reports of all relevant amounts and details, including the tax identity of the beneficiary of the payment, to the authorities. The tax withheld will reduce the tax payable by the individual as calculated from the self-assessment tax return. If a policyholder claims to be tax resident in another country then we will need evidence in the form of a certificate from the tax authority in that country. In such circumstances we will have to withhold tax at the rate of 19%. The policyholder will normally be able to claim a credit for this tax against the tax liability in the other country where there is a double tax agreement in force. 2. (A) Total surrender The gain or loss on the proceeds of a life policy is included in your personal income tax return. The gain or loss is the surrender value less the premiums paid. (B) Tax on partial surrender Calculation of a gain or loss is the same as for total surrender. However, the part surrender amount has to be apportioned between redemption of capital (part of the premium) and profit, and so will affect future calculations. (C) Tax on death benefit Generally, gift and inheritance tax will be payable in most cases, as explained below. However, personal income tax may be payable in certain circumstances on the difference between the premiums paid and the benefits received in the same way as total surrender. (D) tax on fund switching There is no tax on fund switching. 3. Gift and inheritance tax If you make a nomination of your policy then the Spanish gift and inheritance tax position will depend on the residency of the beneficiary. Spanish resident beneficiary A Spanish resident beneficiary will be liable to gift and inheritance tax on the death benefit. We are required to see the tax voucher (or similar) as proof that the beneficiary has made the final return to the tax authority before paying any benefit to them. The regulations of the Spanish Central State or regional authorities may affect the rates of tax and any allowable deductions, and you should obtain independent advice. Beneficiary resident outside Spain As our policy is an asset outside of Spain for Spanish gift and inheritance tax purposes, a beneficiary of a nomination who is not resident in Spain will not be liable to Spanish gift or inheritance tax. continued 15

16 TAX UNDER TRUST Depending on the law under which the contract is written, an appropriate trust can offer a means of holding and managing assets such as your bond for people who may not be ready or able to manage it for themselves. A trust may also be useful for tax planning purposes. Used in conjunction with a will, it can also ensure that your assets are passed on in accordance with your wishes after you die. If your bond is placed under trust and you subsequently fully or partially encash it, there may be a potential income tax liability which could be assessable on you as the settlor, the trustees or the beneficiaries. Any liability to income tax will depend on several factors, including the type of trust and when the bond is cashed in by the trustees. We strongly recommend that you speak to your financial adviser before making any decisions regarding trusts. Should you decide to use a trust you should be aware that Spain does not recognise trusts. As a result there can be no certainty as to how the Spanish authorities would treat the interests of trustees and beneficiaries, if at all, instead of the original policyholder. As the Spanish Collective Investment Bond is an asset outside of Spain for Spanish gift and inheritance tax purposes and the settlor of the trust is a Spanish tax resident, there will be no liability to Spanish gift and inheritance tax where the beneficiary of the trust is not resident in Spain. Spanish gift and inheritance tax will apply where the beneficiary of the trust is resident in Spain. We recommend that you take independent tax and legal advice before making such a request. TAX ON FUNDS Old Mutual International Ireland is not currently liable to tax on policyholder funds. However, investment income building up in any fund may be subject to a tax deduction in the country where the income was produced. Q14. CAN I PUT MY BOND INTO A TRUST? Yes, it is possible to place your bond into a trust if your contract is written under English and Welsh law. If you put your bond in a trust, the trust conditions will need to be followed when making changes to the bond. Details of how the trusts work can be found in the relevant trust literature and in the trust documents. It is important for trustees to ensure that any changes they make to the bond do not breach the trust conditions. We strongly recommend that you speak to your financial adviser before making any decisions regarding trust. Refer to Tax Under Trust above for information as to how trusts are treated in Spain. Q15. CAN I CHANGE MY MIND? Yes. When we notify you that your application for the Spanish Collective Investment Bond has been accepted and send you the appropriate documentation, we will remind you that you have 30 days to change your mind and cancel your contract. You can do this by writing to the customer service centre at the address shown in contact details on page 17 or online via your Online Service Account. If you decide to cancel, we will give you your money, less any charges detailed below. You need to carefully consider this before making any investment. If the value of your investment has fallen in the meantime, you may not get back the full amount you paid in. You should be aware that this reduction could be substantial if your chosen funds have a medium or high level of volatility or risk, or non-refundable charges. The literature of the relevant financial institution will give details if this applies. In cases where the asset you have selected is not redeemable for a period, we may not be able to return that part of your payment until the end of that period. Please note that some assets are priced on a weekly or less frequent basis and certain assets also have cut off times for dealing purposes so you may not be able to disinvest as quickly as you would like during periods of market volatility. This therefore could potentially cause delays in you receiving your money back. Please discuss this with your adviser if this is an area of concern for you. Any Old Mutual International Ireland charges will be refunded in full. If, at your request, we have facilitated the initial fee for advice given to you by your financial adviser and you decide to cancel your contract, we cannot reclaim or refund the fee. The fee agreement is between you and your financial adviser, not Old Mutual International Ireland and it is up to you to reclaim the fee. 16

17 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND OTHER INFORMATION CONTACT DETAILS If you need any further information about this product, please contact your financial adviser in the first instance. If you wish to contact our Administration Centre directly, you can do so in the following ways: Phone: +353 (0) Fax: +353 (0) By writing to our Administration Centre at: King Edward Bay House King Edward Road Onchan Isle of Man IM99 1NU British Isles COMPLAINT PROCEDURES Customer satisfaction is very important to us at Old Mutual International Ireland, but if you do have any cause to complain about the service provided, either by your financial adviser or by Old Mutual International Ireland, you should proceed as shown below. If your complaint relates to the advice you have been given you should write in the first instance to your financial adviser. If it concerns the service you have received from Old Mutual International Ireland, please write to the Compliance Officer at our Head Office address of: Hambleden House,19-26 Lower Pembroke Street, Dublin 2, and we will take the appropriate action to try and resolve your problem. If you are not satisfied with the response you receive and your complaint relates specifically to advice you were given on your Spanish Collective Investment Bond by a UK-regulated financial adviser, you can complain to: Financial Ombudsman Service Exchange Tower London E14 9SR If your complaint relates to the administration or service of your Spanish Collective Investment Bond and if you are not satisfied with our response then you can complain to: Financial Services and Pensions Ombudsman Lincoln House Lincoln Place Dublin 2 D02 VH29 Ireland Tel: (01) info@fspo.ie Website: Complaining to either Ombudsman will not affect your legal rights. You can aslo complain to: Direcion general de Seguros y Fondes de Pensiones Paseo de la Castellana, Madrid 17

18 ABOUT THE POLICY TERMS This Key Features Document gives a summary of our Spanish Collective Investment Bond. It does not include all the definitions, exclusions, or Policy Terms and Conditions. For a copy of the relevant Policy Terms and Conditions and our customer brochure, or for more information about the fund range, please ask your financial adviser. We reserve the right to amend certain contractual terms, some without prior notice, as explained in the Policy Terms and Conditions. If we do so we will let you know in writing and you may, if you wish, cash in your policy. The contract you are applying for defaults to Spanish Law. However, you can request the law of your nationality, and the law of England and Wales must apply if you request a joint applicant case or a trust to apply. If your application is accepted, we will send you the Policy Terms and Conditions confirming the law applying to the contract. You can also obtain a copy of the Policy Terms and Conditions from your financial adviser. All our literature and future communications to you will be in English. STABILITY AND SECURITY The Spanish Collective Investment Bond is designed to give your investment every opportunity for growth in a secure and cost efficient environment. Old Mutual International Ireland s presence in the European city of Dublin means you can be confident that your interests will be protected. Ireland is a full member of the European Union and has strict money laundering legislation which complies with the EU standards. Ireland has a well established and rigorous life insurance regulatory system, which has enabled life insurance companies to be well positioned to operate even in turbulent economic times. As part of this regulation Old Mutual International Ireland is required to prepare and publish a Solvency and Financial Condition Report (SFCR) each year for the Irish Regulator under the Solvency II regulations. This report details the financial position of the organisation and will enable a comparison with other life assurance firms financial positions. You can access this document from our website Old Mutual International Ireland is regulated by the Central Bank of Ireland, which has direct responsibility for the life insurance industry. All life insurance companies licensed in Ireland are subject to Irish Regulation which comply with EU standards. 18

19 Key features of YOUR SPANISH COLLECTIVE INVESTMENT BOND COMPENSATION AND INVESTOR PROTECTION Policyholder protection schemes are regarded as a safety net for policyholders of a life assurance company and allow policyholders to claim for compensation in the unlikely event the life assurance company becomes insolvent. The rules governing schemes and specific rights for each policyholder vary from one jurisdiction to another. In Ireland there is no formal investor protection scheme. However, there are a number of regulatory measures in place to protect the policyholders of an Irish life assurance company. Protection of Old Mutual International Ireland assets OMII currently only writes unit-linked business, where the policyholder selects the underlying assets of the policy. Therefore, there is always a close link between the value of OMII s assets and the liabilities to its policyholders. This means that OMII can meet its obligation to pay the relevant policyholder the encashment proceeds from the policy. The nature of the single product type means that OMII s policyholders cannot be exposed to risks of other business lines, for example, investment guarantees or protection business. As a matter of Irish law and regulation, in the event of a winding up of an Irish-authorised life assurance company, policyholder claims take absolute precedence over any other claims of the life assurance company, the only exception being the cost incurred when winding up the company. Monitoring and regulation of Old Mutual International Ireland s business OMII must provide a set of audited accounts, at least annually to the Central Bank of Ireland (the Central Bank ) for inspection. It is the responsibility of OMII s Head of Actuarial Function to certify (based on certain assumptions) that OMII is able to meet its policyholders claims and has at all times maintained the level of assets it is required to hold as a matter of Irish law and regulation. Under the Solvency II Directive, the EU sets minimum standards of solvency for all EU-authorised life assurance companies using a risk based approach. The Solvency Capital Requirement ( SCR ) is the capital that should be held to ensure that an EU-authorised life assurance company can meet its obligations to its policyholders. The Minimum Capital Requirement ( MCR ) is the minimum level of capital which must be held by an EU-authorised life assurance company. OMII consistently exceeds both the SCR and the MCR by a margin in excess of 200%. The Central Bank has various powers of intervention in the case of doubtful solvency of an Irish-authorised life assurance company. OMII is also subject to regular internal and external audit activity and inspection visits by the Central Bank. This means that OMII is regularly reviewed by the Central Bank to ensure it meets the applicable legal and regulatory requirements in Ireland. Applicable legal and regulatory requirements, and internal policies, dictate how OMII s capital, including the assets used to meet its SCR are invested. These set out cautious criteria which require significant institutional diversification and a high degree of liquidity of deposits. UK Financial Services Compensation Scheme ( FSCS ) Old Mutual International Ireland policyholders who were habitually resident in the UK, at the time of applying for an Old Mutual International Ireland policy, and provided the policy commenced on or after the 1 December 2001 are covered by the UK FSCS. Currently, 90% of the value of policy, at the time the insurer goes into liquidation, is covered under the Scheme. The value of your Spanish Collective Investment Bond is linked to the value of investments generally managed by third parties such as fund managers. In the event that the provider of an asset fails, compensation will depend on the scheme in place where that provider is registered. You should be aware that any compensation arrangements are likely to relate only to Old Mutual International Ireland s aggregate holdings across all affected policies rather than to individual investors. As a result you may not benefit from any scheme. Full details are available from Old Mutual International Ireland on request. As you are invested into funds through a Spanish Collective Investment Bond you are unlikely to be eligible for any compensation schemes which may apply to individuals investing directly. If this is a concern, please discuss this with your financial adviser so you are aware of the possible risks. Old Mutual International Ireland dac, which provides the Spanish Collective Investment Bond, is regulated by the Central Bank of Ireland. Old Mutual International Ireland s products are available only through professional financial advisers. Old Mutual International Ireland dac is a provider of long-term life assurance. 19

20 This document was last reviewed in July Please confirm with your financial adviser that this is the most up-to-date document for your product or servicing needs. Calls may be monitored and recorded for training purposes and to avoid misunderstandings. Old Mutual International Ireland dac is regulated by the Central Bank of Ireland. Registered No Administration Centre for correspondence: King Edward Bay House, King Edward Road, Onchan, Isle of Man, IM99 1NU. Tel: +353(0) Fax: +353(0) Registered and Head Office address: Hambleden House, Lower Pembroke Street, Dublin 2, Ireland. VAT number for Old Mutual International Ireland dac is S. Old Mutual International is registered in Ireland as a business name of Old Mutual International Ireland dac. PDF9026/INT /July 2018