Structured products are often sold under a variety of different names. They are a type of investment mainly targeted at cautious private investors, which typically claim to protect capital while delivering a high level of income or growth.
They have proved to be quite popular with the risk-shy during volatile stock market conditions.
What do Structured Products do?
In simple terms, structured products are a type of tracker fund, linked to a stock market index such as the FTSE 100. However, under the bonnet they are far from simple, and they can be markedly complex financial tools.
There are generally two types of product, one offering income, the other growth. The former products offer a high level of income, usually far more than a bank or building-society account, where the income is fixed for the term of the investment.
The original capital is only ‘guaranteed’ to be returned in full at maturity, however, if the stock market invested in had not gone down, or fallen more than a stated amount (or number of points), since the inception of the investment.
In respect of growth investments, the original capital is usually ‘guaranteed’ at the end of the term – the inherent growth, however, is not. Any growth is based on stock market performance and most importantly. dividends are not included.
Inflation can also erode the value of the plan and protection levels for the capital invested can vary from fund to fund.
Who might Structured Products be suitable for?
Structured products might be suitable for you if you want a return that offers the potential for more than you could otherwise get on a savings account. They might also be suitable for you if you are retiring with a tax-free lump sum that you want to invest but not lock away for too long. Most importantly, however, you must consider the risks and restrictions of this type of investment.
These products have a fixed investment life and you are almost certain to be penalised if you need to stop the investment early. Making sure that a Structured Product is suitable for you and particularly ensuring that you have an adequate emergency fund is of paramount importance.
The Financial Conduct Authority (FCA) recommends than no investor should have:
- more than 10% of their total investments in structured products with a particular counterparty (i.e. the bank providing the capital ‘guarantee’), or
- more than 25% of their total investments invested into structured products, as opposed to other types of products.
From my own experience I have noted that when structured products go wrong they do so horribly and so it would be prudent to halve the percentages just given.
History of Structured Products
Retail structured products have become a feature of the financial services landscape since 1996. As interest rates have fallen below their historic levels, investors requiring income have been attracted by the exceptionally high income rates on offer. Investors who took out the earlier offerings of such products were generally delighted with the returns that they achieved, either in income or capital growth.
However, in the first decade of the 21st century structured products let many investors down badly. This was not so much the design of the products themselves but poor selling practices and particularly from investors purchasing these products through newspaper advertisements with no real understanding of what they were buying.
The problems first appeared during the severe bear market of 2000 to 2003. This showed for the first time that there can be a fairly severe downside to some of these products in terms of capital loss. They came to be known colloquially as ‘precipice bonds’. Sadly, many investors during this period lost all, or virtually all, of the capital which they invested into, what turned out to be, the riskier structured products on offer.
The credit crunch saw the collapse of Lehman Brothers, counterparty to many structured products and the demise of Keydata in June 2009 following problems over its selling of structured product ISAs.
The market has learned from these setbacks. Product design has improved and the majority of products now offer good capital protection. Perhaps more importantly, advice firms and their advisers have had to make sure that they really understood what they were recommending to their clients.
In light of the collapse of Lehman Brothers the FSA (now the Financial Conduct Authority) carried out reviews into both the promotion of, and advice on structured products and issued their findings in three papers in October 2009. Structured product brochures are now much clearer on the risks involved and the compensation arrangements if counterparties default.
In particular, whereas in their early days, 80% of retail structured products were sold through newspaper advertisements, direct offers through the post, or over the counter at a high street bank branches independent financial advisers now account for around two-thirds of the market.
“Tighter regulation, more proactive ratings agencies and more onerous capital requirements placed on banks through legislative changes like Basel III mean that structured product providers now operate in a stricter environment than previously and while this will never guarantee that a bank will not default again advisers should be confident that providers of structured products have had to undergo a thorough examination of their structure and financial stability. Ironically, this probably stifles product innovation.”
Adrian Gaspar, Senior Consultant, Defaqto – Inside Structured Products, October 2012
The Retail Distribution Review (RDR), which came into being in December 2012, has also had an effect in that independent financial advisers need to review all types of retail products that might be suitable for their clients and this, of course, includes structured products.
What are Structured Products?
Structured products have been defined as ‘products that deliver a known return for given product circumstances.’ In effect they are tailor-made investments composed of bond-like elements and financial options, each providing a specific exposure or protection for the investor. The sum of these elements creates an investment product that an individual investor would find it difficult to replicate.
The return is based on the performance of one or more stockmarket indices, or a portfolio of shares, but usually with some form of capital protection. Some structured products providing a high level of income provide no capital protection and these are referred to by the FCA as ‘structured capital at risk products’ (SCARPS). Providers of SCARPS now have to inform clients periodically on the progress of their product and the risk the capital may be at.
One of the reasons that independent financial advisers were slow to use these products for their clients is that structured products are tranche products which are only open to subscription for six to eight weeks and there is not always a new product available once one tranche has closed.
This meant that an adviser would be involved in a great deal of research into a product that would only be available for a short time and the costs involved in doing this could easily become prohibitive. However, while some providers will launch a structured product relatively infrequently, many now ensure that once one tranche has closed another of a similar structure and objectives will become available.
It is important to remember that structured products are not an asset class in themselves; they are merely a way of gaining exposure to asset classes. If your risk profile as an investor shows that you should hold 40% in equities, then a structured product linked to an equity index could form part of that 40%.
One of the advantages of structured products is that they ‘do what they say on the tin’ and this is after all charges have been taken out. The difficulty is that you would need a very big tin to put down all of the information which any potential investor should know and understand before investing.
Looking under the bonnet
Please let me make a very important point here. I don’t find it necessary to look under the bonnet when I purchase a new BMW as I have had eight of nine new BMWs over the years and only once has one not started and that was because I left the parking lights on too long and it drained the battery sufficiently not to start. I did an engineering apprenticeship in my youth and later became the production manager of a pen manufacturing company. However I am not overly concerned about how the BMW engine works because over the years I have built up a good level of trust in this particular manufacturer.
Over the years many of my former clients stated that same level of trust in me and didn’t want me to ‘lift the bonnet’ and discuss particular products that I was recommending. However gratifying that was to have built up such trust it was dangerous for the clients and I did my level best to get them to understand the tools I was using to help them achieve their financial goals. My company even won a national award for educating our clients and were shortlisted for that award in a number of other years.
The world is changing, however, and I would now go so far as to say that if you really do not understand how a particular investment product works you should not invest in it, even if it is recommended by a trusted independent financial adviser.
The basic components
There are three components to any structured product. Two will be new to most visitors to this website so let me start with one with which you will be familiar:
- Charges and costs – the returns quoted in a Structured Product are net of explicit and implicit charges so if the income is stated as 5% pa or the return is stated as 100% of the growth in the FTSE 100 over the period capped at 40%, that is exactly what you will receive. There may be tax to pay on this but you will receive the returns indicated.
- It is important for you to be aware, however, that there are also situations in which the costs are, in reality, higher than detailed in the product literature. For example there will be a loss of potential dividend payments which is an effective additional charge. Returns may be capped or participation rates may be low which again is an effective additional charge.
- Zero coupon bond – this is not an actual bond but is basically a discounted deposit. A zero coupon bond or ‘zero’ is a debt security (also referred to as a loan note) that has no coupon, that is, it does not pay interest. It is bought at a price lower than its face value, with the face value due to be repaid at the time of maturity. This is the foundation on which the return of capital is built but also where the ‘counterparty risk’ is (see later heading).
- As the entire payment is made at the maturity of the ‘zero’ its value can fluctuate a lot before then which is why you don’t want to be in a situation of surrendering a structured product before the official maturity date.
Example: Assuming that the bond provider of a six year structured product is able to obtain an interest rate of 3% pa, the product would need to set aside approximately 86.2% of the original product so that this would grow to 100% after six years. Assuming 5% for expenses this leaves 8.7% to provide the index performance on which the eventual return is based.
- Option or options – these are used extensively in structured products. An option is also referred to as a ‘derivative’ because it derives its price from something else. The majority of structured products are linked to well-known indices, particularly the FTSE 100, so the eventual return is derived from the FTSE 100 in that case rather than the option itself.
- Two types of options are used. ‘Call options’ are purchased and ‘put options’ are sold to provide a link to growth in the underlying investment. Put options are also sold to provide income. It is important to note that the investor is contracting with the structured product provider to provide the specified return. Therefore, if the bank that is structuring the plan loses money on their options, this will not affect the stated return to be paid to the client.
The diagram below shows the three components that make up a structured product.
Main types of Structured Products
There are many types of structured products which are available to retail investors but the main ones are as follows:
- Structured deposits – these are the lowest risk structured products as they are always capital protected at maturity and invest in cash deposits, with the interest payments linked to the performance of an underlying asset, often the FTSE 100. If held to maturity, even if the underlying asset has fallen in value, you will receive back the initial amount invested in full.
- Most importantly, structured deposits that are registered in the UK are covered by the Financial Services Compensation Scheme (FSCS) up to the statutory limits, ie £85,000 for a single depositor per authorised institution. You should exercise care to ensure that you don’t already have deposits with the counterparty (i.e. bank) being used. It is important to note that structured deposits registered offshore (e.g. Isle of Man) do not have this same protection.
- Structured investments with capital protected – there are various versions of these as follows:
- Uncapped capital protected – a typical product would offer a percentage of the growth in the FTSE 100 (or other indices or assets) whilst offering 100% capital protection at maturity. These types of products could be attractive to you if you are looking to participate in the growth of a real asset.
- Capped capital protected – a typical product would offer a percentage of the growth in the FTSE 100 (or other indices or assets) capped at a certain percentage return and offering 100% capital protection at maturity.
- Whether the uncapped or capped product is better in the event will depend on the product design and the market movements over the term of the product. For example, a capped product with 100% participation in the FTSE 100, but capped at 50% return, may produce a better return over the term than an uncapped product offering 80% participation in the index if the index rose by 50% or less. Equally the uncapped product would outperform if the index were to rise above 62.5% over the term.
- Digital products – a digital product will offer a fixed return assuming certain conditions have been met, generally that the index is above a specific level at the final observation date. For example a plan may pay a fixed return of 30% if the FTSE 100 is at, or above, its initial level after five years. If you are a cautious investor and you feel that market performance is going to be very modest this type of plan could be suitable. If markets were to perform exceptionally well then the return from this digital product will tend to underperform a non-structured investment because the structured product will still be capped at 30%.
- Cliquet products – cliquet, also known as ratchet, products are generally sub divided into smaller time periods within the term of the plan, so a five year plan may have 10 half-yearly periods during which returns will be based on start and finish levels within each six month period. Cliquet products are generally capital protected with the upside in each period capped and a floor will be set to protect downside. While these products could be suitable for you as a cautious investor, as capital is protected and there is usually a minimum payment, the index would have to perform well in every period to maximise returns and growth is not compounded.
- Minimum return products – these are designed to offer a fixed modest amount of growth or a percentage of the growth in the index if greater. The capital protection and fixed return may be attractive to you as a cautious investor although the participation rate in the index is often much lower than other structured products, for example 50%.
- Structured investments with capital at risk – there are various versions of these. You might wonder why you would want to invest in a capital at risk product over a capital protected product. One of the basic rules of investing is that risk and return are directly related. If you invest in a low risk, capital protected product you can only really expect a modest return. If your objective is to grow your capital in real terms (i.e. ahead of inflation) then you will need to take a higher level of risk to achieve this higher return. By using a structured product you are able to more accurately quantify the level of risk that you are taking. The main types of capital at risk structured products are as follows:
- Accelerated products – these offer a multiple of the returns (leveraged) of an index with some protection against underperformance. A typical product may offer two, three or four times the growth in the FTSE 100 but be capped, at say 80%. So again, this could be attractive in low growth markets but the leverage return comes at a cost as capital could be at risk at maturity if a downside barrier (often 50%) is breached at anytime during the term of the plan.
- Reverse convertible products – these are designed primarily to provide income and they provide a higher level of income than would normally be achievable from bond, property or equity assets. However they also have a capital at risk feature (often using a barrier set at 50% of the initial strike level), that is, if the initial index level never falls by more than 50% during the term of the product you not only get the high income but your money back at the end of the term.
- Kick out products – also known as ‘autocalls’, kick out plans are designed to potentially provide an early return well in excess of what you could expect from a deposit account depending on the performance of the index. They have the potential to ‘kick out’ i.e. mature early, returning the initial investment and specified return. For instance, a plan may offer a return of 6% pa if the FTSE 100 is at or above its initial level at any on the annual observation dates. The trade-off is that kick out plans will not offer capital protection if a downside barrier, usually 50%, is breached either at anytime during the investment term or at maturity.
- Kick out plans look attractive as they provide multiple opportunities to achieve the annual return. Some kick out plans are available in the deposit format, which will mean that capital is returned in full at maturity should an earlier ‘kick out’ not have occurred.
Understanding the terminology
The terminology used around structured products is not familiar or obvious. I have included below the main terms that you should at least have an awareness of if you are intending to invest in a structured product:
- Issuer – the financial institution (usually an investment bank) responsible for investors’ capital return at maturity. This is where the ‘counterparty risk’ comes from.
- Counterparty risk – this is the risk that the issuer of the structured product may not be able to fulfil its promises in the product. It will be clear that the strength of the protected part of the product is only as good as the strength of the bank or other institution, that is, the ‘counterparty’ which is looking after the major part of the product which is deposited with them.
- Credit rating agencies – the three leading credit rating agencies are Standard and Poor’s, Moody’s and Fitch. All three credit rating agencies use letter designations AA, Baa, BBB etc. to reflect their opinion of the strength and ability of a company to meet its obligations.
- The events of recent years have shown that the rating agencies are not infallible and a credit rating should not be used in isolation to justify your investment, nor do the ratings apply to any individual structured product.
- Credit default swaps – many analysts use another measure to help assess the strength and financial stability of a counterparty – the credit default swap (CDS) rate. A CDS is basically a form of ‘credit insurance’ which ensures that a company purchasing a debt instrument in a bank or other institution will receive its money back if the bank is unable to meet its obligations. The CDS rates (i.e. premiums) are quoted in the form of a spread over LIBOR so if the spread increases, this suggests that the market feels the credit quality of the issuing company will deteriorate, while if spreads narrow this will indicate a perceived improvement in credit quality. LIBOR is the London Interbank Offered Rate which is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks.
- Not all financial institutions have a CDS rate and CDS rates can be volatile measures in themselves, changing daily. However, they do provide a more frequent snapshot of the perceived or actual credit quality of the institution than a credit rating.
- Capital protection – this is usually provided by placing a proportion of the original product in a zero coupon bond which will pay out the protected amount at maturity. There are two types of protection generally offered:
- Hard protection – is where the minimum return is fixed regardless of the underlying product performance. The extent of the protection provided is expressed as a percentage of the investment capital which is protected. In most cases, except when there is 100% protection, losses can be incurred for any negative movement in the underlying asset up to the level set by the barrier. The value of the investment will track the performance of the underlying index but the barrier caps the maximum loss at a predefined level.
- Soft protection – is where the minimum return will only be achieved if the underlying product maintains a certain level. If not, the protection can be lost in part or completely. The level of protection offered is directly linked to the level of participation offered in the particular asset. In other words, the greater the capital protection, the less participation in the performance of the index or asset and vice versa.
- The FCA requires this form of protection to be described as ‘capital at risk’. The degree of the protection provided is expressed as a percentage of the start value/strike date of the underlying, and identifies the amount of negative movement of the underlying asset before the capital invested is affected.
- Protection barrier – there are different types of barriers and these will have different times during the term of the product when the underlying investment is measured, called observation points:
- European Barrier Option – the level of the underlying index is taken at the close of business on the final valuation date only.
- American Barrier Option – the level of the underlying index is taken at the close of business of each trading day throughout the whole life of the product. Clearly with more observation points, there is an increased likelihood of a barrier breach being observed.
- Market averaging – this is the process of averaging an index/asset level. This is normally to determine the final level, but sometimes to set the initial level. Final averaging may be at any frequency (typically monthly or daily) over a fixed time frame, for example the final year or six months of the product period. Initial averaging tends to be over much shorter periods.
- Most structured products introduce market averaging over the final 6 or 12 months of the term, so if the value of the index being tracked does take a tumble towards the end of the term, the averaging will dampen the effects. Of course it has the opposite effect if markets are rising as the upside return is diluted.
- Participation – returns at maturity can be geared, that is, the percentage return could be more or less than the equivalent asset performance. In broad terms, the higher the participation in the performance of the asset, the less the capital protection. Sometimes, in order to maintain a high participation rate and maintain good capital protection, the return at maturity can be capped.
- Gearing – a measure of the movement in product value as a percentage of the movement in underlying index/asset level. 300% gearing is a 3:1 movement. Gearing may be at different levels for rises and falls.
Access to your money
The majority of structured products have an investment term of between three years and six years and are designed to be held until maturity in order for you to receive an optimum return.
Structured products generally have little or no liquidity (the ability to freely buy or sell an investment) because they can normally only be sold back to the issuer, and because the issuer generally does not keep an inventory of the product after the original offering period. This, combined with the fact that any capital protection is only effective if the product is held to maturity, makes it important you to ensure that you are able to leave your investment untouched for the duration of its term.
The underlying product
The underlying product for the majority of UK retail structured products has been the FTSE 100 index. However, the market is increasingly offering products linked to a wider range of asset classes. Structured products can now be found which link to a range of stock markets or other financial indices or indeed almost any measurable asset type (e.g. commodities, house prices, inflation).
Where the asset is valued in a foreign currency the return is almost always hedged for retail structured products, that is, the currency difference between say the US dollar and the UK pound is not taken into account and does not become an extra risk for you to think about.
Products will not necessarily be linked to just one index or asset. Sometimes, the return can be dependent on the performance of more than one index and this will obviously change the risk profile of the product.
If the product is linked to say, the FTSE 100, the Nikkei 225 and the Nasdaq 100, you need to be clear whether returns are based on all three indices, or the worst performer or the best performer.
The taxation treatment of a structured product will depend on the type used.
- Structured deposits – structured deposits and in the main, income producing structured products, are subject to the personal income tax regime.
- Structured products – growth structured products are subject to Capital Gains Tax (CGT). In view of the generous annual exemption and the fact that the maturity date is usually known, this means that there is an opportunity for some beneficial tax planning. This is more flexible than income tax for you if you can make use of your annual CGT exempt amount. Furthermore, by being aware of your likely income tax situation in the year of maturity you can plan accordingly.
- You would need to bear in mind that a plan with an early maturity kick-out can mature early and throw out any carefully thought-out tax planning.
- Cash ISAs – structured deposit products can normally be held within a cash ISA up to the maximum annual cash ISA investment amount. You may have built up a large amount in cash ISAs over the years and part of this could be transferred into a structured deposit.
- SIPPs – capital protection is a useful feature if you have a large fund held in a self invested pension plan (SIPP). Many structured products are suitable for holding within a SIPP.
Structured Product advantages
Structured products are not be suitable for many investors but there are situations in which they can be beneficial.
- Predefined returns – the defined nature of the returns could provide an element of comfort to you allowing you to calculate the possible returns or potential losses in certain market conditions before you make an investment.
- Protected capital – there are a wide variety of products that can either offer full capital protection irrespective of how the index performs, or capital protection assuming the index does not hit a set barrier.
- Relatively low costs – the costs compare favourably with those of many other investments such as hedge funds and some unit trusts.
- Absolute returns – meaningful positive returns can be made in low growth or even falling markets. Some products can offer returns as long as the index is only marginally higher than the initial level. These products will not offer full capital protection if downside barriers are breached but the returns can be attractive.
- Geared returns – some products have offered more than 100% of the rise in the index, which in flat or low growth markets gives you a chance to achieve higher returns.
- Set maturity dates – this can aid tax planning especially if a series of structured products are arranged to mature one year after the other with known maximum gains within an your annual CGT exempt amount.
- Uncorrelated returns – used as part of a wider investment portfolio structured products can either produce returns that are uncorrelated to market conditions or returns that are greater than the underlying assets. Structured products can be useful in portfolios because they can be used to mitigate two key areas of concern for investors, which are investment losses and uncertain returns.
- Diversification – allowing you to allocate funds, say, to new or emerging markets with transparency, whilst managing risk and exposure.
- Tax benefits – a variety of wrappers can be used with structured products offering a number of tax advantages. Some returns attract capital gains tax which is lower than many investors’ income tax rates. Other products can be included in an ISA, where returns are tax-free. A pension could also be used effectively to deliver tax efficiency.
Structured Product disadvantages
If you are considering an investment in a structured product there are potential disadvantages which need to be faced.
- Risks – there are varying levels of risk (usually high) with this type of product, which may not be suitable for you.
- Market risk – the performance of structured products is linked to one or more indices or other underlying measure so returns are determined by the level of the index on the date the product matures (or averaged over a set number of months prior to maturity). Therefore market risk is still an important factor to consider.
- Counterparty risk – structured products are contracts issued by a counterparty, usually a major bank. If the bank becomes insolvent or defaults on the contract then you may lose all of your original capital investment because many structured products are not covered by the Financial Services Compensation Scheme (FSCS). The exception to this is structured deposits registered in the UK which are usually covered by the FSCS up to the statutory limits.
- The terms of any guarantees – these can be complicated.
- Access and flexibility – structured products are designed to be held for the full term, often five or six years, so they will not suit you if you may who may need to get your money out before maturity.
- Dividends – as indices like the FTSE 100 are capital-only indices, you will not benefit directly from any dividends paid out by the companies in the underlying index.
- Capped returns – in order to provide the capital protection and defined level of growth structured products will often cap the amount by which they can grow. You can therefore miss out on strong market performance and in a bull market such a cap is very limiting. If you are willing to forgo capital protection then it is possible to find products with unlimited upside.
- Cost of product guarantees – these are paid for within the structure of the contract which offsets returns.
- Fixed dates – the fixed start and end dates mean that it is not possible to take account of current market conditions when investing or taking your money out of the market.
- Exit penalties – as with many other investment products there may be early exit penalties or barriers to exit.
- Platform availability – this is constantly improving and quite a number of investment platforms will allow transactions in structured products. However, many platforms will only allow transactions from a small number of major players in the market.
Questions to ask
It is easy for anyone to get carried away with the promise of an income of 5% pa guaranteed for five years. It is important that you understands what is being promised and in what circumstances you will not get your capital back. It is also important for you to understand what the counterparty risk is.
Once you do understand the product you can rest assured that (subject to the counterparty risk) the product will do exactly what it says it will do.
Before investing you should be clear that you understand the answers to the following questions:
- Which asset (or assets) is the product giving exposure to, and does this fit in with your asset allocation strategy?
- What is the term of the product?
- What are the potential penalties for early surrender?
- Is the protection and/or participation dependent on the performance of more than one asset?
- What is the level of capital protection?
- Is it hard or soft protection that is offered?
- What is the level of participation in the performance of the underlying asset?
- Is the return at maturity capped?
- What is the tax treatment of the product?
- Is the product available through a desired product or platform?
- Has the product got an early redemption kick-out?
- Does any averaging of asset performance at the start or end of the term fit in with your view of the market?
- Are you happy with the counterparty?
- Investors may not get all of their capital back. Risk-averse investors who do not want to lose any of their original investment are advised to opt for a product where capital losses are not linked to investment returns.
- Plan returns are based on the performance of an index or particular asset class. The past performance of an index or particular asset class is not a guide to its performance in the future and there is no certainty that the future performance of an index or particular asset class will be positive.
- Plan returns do not include any returns from dividend income or participation in corporate actions, as would be the case if you invested directly in the shares underlying the index etc. Accordingly, the return on the plan may, in some cases be less than the return from a direct product in these shares etc.
- Most Structured Products are affected by liquidity risk as they usually have an investment term of between three to six years. Investors should consider their ability to hold the investment for the required term, without the need for access to the funds.
- A structured product is not the same as a bank or building society account where capital is guaranteed and usually readily available without penalty. There is a risk that the product provider may not be able to meet their obligation to pay the advertised returns or to repay product capital both during and at the end of the product term. This is referred to a ‘counterparty risk’. The strength of the bank or institution holding the major part of the investment is key to ensuring the protected part of a structured product, and if the counterparty defaults this could result in a loss to the investor. In such an event the investor would not have recourse to the Financial Services Compensation Scheme (FSCS) except in the case of UK arranged structured deposits.
- The amount of initial capital repaid may be geared which means that a small percentage fall in the related index may result in a large reduction in the amount paid out. For example, a two for one gearing reduces the capital by 2% for each 1% fall in the relevant index.
Links to other types of investments
- ISAs (Individual Savings Accounts)
- Unit Trusts and OEICs
- Investment Trusts
- Investment Bonds
- VCTs (Venture Capital Trusts)
- Money Advice Service Structured Products
- If you need personal financial advice on Structured Products then I am happy to introduce you to Flying Colours Life who have access to independent financial advisers throughout the UK
This information does not constitute personal advice and should not be treated as a substitute for specific advice based on your circumstances.
Information given relating to tax legislation is based on my understanding of legislation and practice currently in force. Whilst I believe my interpretation of current law and practice to be correct in these areas, I cannot be responsible for the effects of any future legislation or any change in interpretation or treatment. In particular you are warned that levels of tax and tax reliefs are subject to alteration and, in any case, the value of such reliefs and benefits may depend on an individual’s circumstances.
If you are in any doubt as to whether any course of action is suitable for you, then you should discuss the matter with a suitably qualified independent financial adviser or other specialist.