FTSE 100 and RPI Combination Plan 6 (ISA only)

Transcription

1 Invest via an ISA for 2008/09 and/or 2009/10 This communication is meant to be read only by professional financial advisers. FTSE 100 and RPI Combination Plan 6 (ISA only) Only available to UK tax resident individuals Plan objective The objective of the Plan is to deliver a quarterly payment which is fully indexed to UK inflation via its core measure, the Retail Prices Index (RPI), and to return at an amount equal to 100% of the initial Plan investment. If the FTSE 100 Index falls below 50% of the Initial Index Level at any point during the Investment Term, and the Final Index Level is less than the Initial Index Level, the initial investment will be at risk on a one-for-one basis for any percentage point fall in the Final Index Level as compared to the Initial Index Level. If, however, the FTSE 100 does not fall below 50% of the Initial Index Level, or falls but the Final Index Level recovers such that the Final Index Level is equal to or greater than the Initial Index Level at, a payment of an amount equal to 100% of the initial Plan investment will be protected (please see Table B below). Table A: Quarterly payments (assume 1% per quarter RPI compound growth) Double ISA opportunity Invest via an ISA for 2008/09 and/or 2009/10 The Plan will be comprised of a Medium Term Note (MTN) and will deliver: 20 quarterly payments equivalent to 2% of the initial investment plus full indexation of each payment to UK inflation (RPI), regardless of FTSE 100 performance; Maturity payment of an amount equal to 100% of the initial investment, provided the FTSE 100 Index; a. does not halve at any point during the Investment Term, or, b. halves during the Investment Term but recovers such that the Final Index Level is equal to or more than the Initial Index Level. Payment Quarter Initial Plan investment of 10,000 Quarterly Amount (2%) RPI growth Quarter gross proceeds Total 4, , Accumulation Investment Income Structured FTSE 100 and RPI Combination Plan 6 20 quarterly payments equivalent to 2% of the initial investment plus full indexation of each payment to UK inflation (RPI), regardless of FTSE 100 performance Investment allocation between deposits and Medium Term Notes to deliver tax efficient returns Maturity payment of an amount equal to 100% of the initial investment provided the FTSE 100 does not halve at any point during the Investment Term Your initial investment is at risk if the FTSE 100 halves at any point during the Investment Term Limited offer ends: 17 April 2009 Double ISA opportunity Table B: Potential plan proceeds for an initial Plan investment of 10,000 Final Index Level/Initial Index Level Total yearly proceeds over 5 year Term Index DOES NOT fall by 50% or more during the Investment Term Total Plan proceeds Index DOES fall by 50% or more during the Investment Term Total Plan proceeds 20% 4, , , , , % 4, , , , , , , , , , % 4, , , , , % 4, , , , , % 4, NA NA 4, , % 4, NA NA 0 4,

2 Key investment terms Offer period Index Term 23 February 2009 to 17 April 2009 for direct investments and for 2009/10 ISA investments. 3 April 2009 deadline for 2008/09 ISA investments. ISA transfer applications must be received by 3 April 2009, to allow time for processing. FTSE 100 Index; UK Retail Prices Index (RPI). In the circumstance that RPI growth (as measured between the RPI Start Date and RPI End Date) is negative, the post indexation adjustment factor to be applied to a 2% quarterly payment would be 1. This ensures that the investor would not be exposed to any deflation during the Investment Term. 5 years and 1 week Initial Index Level The Initial Index Level is the closing level of the Index on 5 May Final Index Level The Final Index Level is the average of the closing levels of the Index on each Business Day from, and including, 8 November 2013 to, and including, 9 May Initial investment risk Return Initial commission Early Bird Interest Investment levels Taxation How to invest Investment start date 5 May 2009 If the FTSE 100 Index falls below 50% of the Initial Index Level at any point during the Investment Term, and the Final Index Level is less than the Initial Index Level at the Plan Maturity Date, the initial investment will be at risk. The initial investment will be at risk on a one-for-one basis for any percentage point fall in the Final Index Level as compared to the Initial Index Level. If the FTSE 100 does not fall below 50% of its initial level, during the Investment Term or if the FTSE 100 does fall below 50% of the Initial Index Level during the Investment Term but the Final Index Level recovers such that the Final Index Level is equal to or greater than the Initial Index Level at, the investor s initial Plan investment is returned at. 20 quarterly payments each of an amount equivalent to 2% of the initial investment plus full indexation of each such payment, indexed to UK inflation (RPI). Maturity payment of an amount equal to 100% of the initial Plan investment if the FTSE 100 does not fall below 50% of the Initial Index Level. If at any point during the Investment Term the FTSE 100 Index falls below 50% of the Initial Index Level, the payment of an amount equal to 100% of the initial Plan investment is at risk on a one-for-one basis. 3% of the initial investment amount (excluding Early Bird Interest). Initial commission will be payable based on the investor s initial investment amount. Commission will be paid following the commencement of the Plan. Early Bird Interest is 1.5% gross per annum. For 2009/10 ISA applications, Early Bird Interest will accrue from 6 April Minimum: 1,500 and Maximum: 7,200 for new ISA Investments, no maximum for ISA transfers. No tax is payable on any gains made within a stocks and shares ISA. Early Bird Interest will be paid net of a 20% flat rate charge for ISA investments. Taxation considerations are subject to change and will depend on the individual circumstances of each investor. Stocks and shares ISA for 2008/09 and/or 2009/10* or ISA transfer* Maturity date 12 May 2014 These key investment terms should be read in conjunction with the Plan brochure. * UK tax resident individuals only. 2

3 Invest via an ISA for 2008/09 and/or 2009/10 FTSE 100 and RPI Combination Plan 6 (Non-ISA) Plan objective The objective of the Plan is to deliver a quarterly payment which is fully indexed to UK inflation via its core measure, the Retail Prices Index (RPI), and to return at an amount equal to 100% of the initial Plan investment. If the FTSE 100 Index falls below 50% of the Initial Index Level at any point during the Investment Term, and the Final Index Level is less than the Initial Index Level, the initial investment will be at risk on a one-for-one basis for any percentage point fall in the Final Index Level as compared to the Initial Index Level. If, however, the FTSE 100 does not fall below 50% of the Initial Index Level, or falls but the Final Index Level recovers such that the Final Index Level is equal to or greater than the Initial Index Level at, a payment of an amount equal to 100% of the initial Plan investment will be protected (please refer to tables overleaf). The Plan will allocate the initial investment between deposits and a Medium Term Note (MTN) to deliver tax efficient returns. The initial Plan investment will be divided as follows: 20 term deposits 40% of the initial Plan investment will be divided into 20 equal term deposits to deliver the 20 quarterly payments of 2% plus UK inflation (RPI) indexation, on each such payment. MTN: Maturity payment 60% of the initial Plan investment will purchase a MTN issued by Investec Finance plc to provide the payment. An amount equal to 100% of the initial Plan investment will be returned, provided the FTSE 100 Index: a. does not halve at any point during the Investment Term, or, b. halves during the Investment Term but recovers such that the Final Index Level is equal to or more than the Initial Index Level at the Maturity Date. Accumulation Investment Income Structured FTSE 100 and RPI Combination Plan 6 20 quarterly payments equivalent to 2% of the initial investment plus full indexation of each payment to UK inflation (RPI), regardless of FTSE 100 performance Investment allocation between deposits and Medium Term Notes to deliver tax efficient returns Maturity payment of an amount equal to 100% of the initial investment provided the FTSE 100 does not halve at any point during the Investment Term Your initial investment is at risk if the FTSE 100 halves at any point during the Investment Term Limited offer ends: 17 April 2009 Double ISA opportunity Plans open for investment from 23 February 2009 to 17 April

4 Taxation of Plan proceeds at a glance for UK tax resident individuals Under current law and practice, if the investor invests directly into the Plan (not via an ISA, ISA transfer or SIPP/SSAS), it is expected that the UK taxation treatment will be as follows: The quarterly payments of 2% are a return of initial investment capital and do not give rise to any tax liability; UK inflation (RPI) indexation on the 2% deposit amounts will be subject to deduction of lower rate tax at source (currently at a rate of 20%) and will be taxable at the investor s marginal rate of tax in the year of payment (see Table A). For example, at the Plan, a portion of the return at may be subject to Capital Gains Tax (CGT) (see Table B). For example, should the Plan return an amount equal to 100% of the initial investment, the arising gain subject to tax would be equal to 40% of the initial investment. There is, however, an annual CGT exempt amount ( 9,600 for 2008/2009), such that investors only pay tax on total gains (including other capital gains the investor may make in the same tax year that the Plan matures) in excess of the exempt amount. Table A: Quarterly payments (assume 1% per quarter RPI compound growth) Payment Quarter Initial Plan investment of 10,000 Quarterly Amount + (2%) RPI growth Deposit gross proceeds Income Tax deducted at 20% New quarterly payment* Total 4, , , * Higher rate tax payers may be subject to further income tax. Table B: Potential plan proceeds for an initial Plan investment of 10,000 Final Index Level/Initial Index Level Index DOES NOT fall by 50% or more during the Investment Term Initial Investment in Note (60%) Capital gain / (loss) Index DOES fall by 50% or more during the Investment Term Initial Investment in Note (60%) Capital gain / (loss) 20% 6, , , , , , % 6, , , , , , , , , , , , % 6, , , , , , % 6, , , , , % NA NA NA 6, , , % NA NA NA 6, , Taxation of Plan proceeds at a glance for Non-UK tax resident investors Non-UK tax resident investors should consult their tax advisor on the tax implications of making the investment, especially as the investment is in a UK tax situs asset. 4

5 FTSE 100 and RPI Combination Plan 6 (Non-ISA) continued Key investment terms Offer period 23 February 2009 to 17 April 2009 Index FTSE 100 Index; UK Retail Prices Index (RPI) In the circumstance that RPI growth (as measured between the RPI Start Date and RPI End Date) is negative, the post indexation adjustment factor to be applied to a 7.5% yearly payment would be 1. This ensures that the investor would not be exposed to any deflation during the Investment Term. Term 5 years and 1 week Initial Index Level The Initial Index Level is the closing level of the Index on 5 May Final Index Level The Final Index Level is the average of the closing levels of the Index on each Business Day from, and including, 8 November 2013 to, and including, 9 May Initial investment risk Return Initial commission Early Bird Interest 40% of the initial Plan investment is invested in term deposits which are fully guaranteed at their respective Maturity Dates. 60% of the investor s initial Plan investment is at risk if the FTSE 100 Index falls below 50% of the Initial Index Level at any point during the Investment Term and the Final Index Level is less than 60% of the Initial Index Level. If, however, the FTSE 100 does not fall below 50% of the Initial Index Level during the Investment Term or if it the FTSE 100 does fall below 50% of the Initial Index Level during the Investment Term but the Final Index Level recovers such that the Final Index Level is equal to or greater than the Initial Index Level at, the investor s initial Plan investment is returned at. 20 quarterly payments each of an amount equivalent to 2% of the initial investment plus full indexation of each such payment, to UK inflation (RPI). Maturity payment of an amount equal to 100% of the initial Plan investment if the FTSE 100 does not fall below 50% of the Initial Index Level. If at any point during the Investment Term the FTSE 100 Index falls below 50% of the Initial Index Level, the payment of an amount equal to 100% of the initial Plan investment is at risk on a one-for-one basis for any percentage point fall in the Final Index Level as compared to the Initial Index Level. 3% of the initial investment amount (excluding Early Bird Interest). Initial commission will be payable based on the investor s initial investment amount. Commission will be paid following the commencement of the Plan. Early Bird Interest is 1.5% gross per annum. Investment levels Minimum: 1,500 and Maximum: 1,000,000 5

6 Key investment terms Taxation Based on current UK tax law and practice, UK tax resident individuals may be taxed as follows: Quarterly payments are allocated as follows: a. a return of initial investment capital that will not be liable to tax; b. an amount representing interest earned (at a rate of UK RPI) on cash held on deposit, which will be paid net of lower rate tax. There may be further tax payable dependent upon the individual investor s marginal rate of tax. For indicative income tax calculations, see previous tables. At, capital returns on the MTN are expected to be subject to UK Capital Gains Tax treatment. Non-UK tax resident investors are advised to consult a relevant tax advisor. Early Bird Interest will be paid net of lower rate tax. There may be further tax payable dependent upon the individual investor s marginal rate of tax. Early Bird Interest and interest earned on the term deposits by non-tax-paying UK tax resident individuals who have completed the necessary form R85 will be paid gross. Taxation considerations are subject to change and will depend on the individual circumstances of each investor. Non-UK tax resident investors who have completed the relevant version of Form R105 will not be subject to tax at source. How to invest Direct investment SIPP/SSAS Pension arrangements Trustee, Corporate and Charity investments Investment start date 5 May 2009 Maturity date 12 May 2014 These key investment terms should be read in conjunction with the Plan brochure. To order client literature Call Online This material is issued by Investec Bank plc of 2 Gresham Street, London EC2V 7QP, which is authorised and regulated by the Financial Services Authority and a member of the London Stock Exchange. It is not being issued to, nor should it be redistributed to or used by, persons who are retail customers. This material does not constitute investment advice and should be read in conjunction with the Plan brochure. Whilst all reasonable care has been taken to ensure that the information stated herein is accurate and opinions fair and reasonable, neither Investec Bank plc nor any of its directors, officers or employees shall be held responsible in any way for the contents of this document. Past performance of investments is not a guide to future performance. 6