For customers Wealth Management Portfolio A flexible, tax-efficient investment

Transcription

1 For customers Wealth Management Portfolio A flexible, tax-efficient investment

2 Introducing our Wealth Management Portfolio Our Wealth Management Portfolio is a tax-efficient offshore bond with lots of useful features and benefits. The specific benefits of investing offshore and in our Wealth Management Portfolio will depend on your individual circumstances and needs. But there are many reasons we believe it can help you achieve your financial and investment objectives. Wealth Management Portfolio offers a comprehensive level of features and benefits and has been rated 5 Star by independent financial research and software company Defaqto. Contents An overview of our Wealth Management Portfolio Page 4 Tax efficient and you re in control Page 6 Your investment choice Page 8 Protecting your estate from inheritance tax Page 10 Living or retiring abroad? Page 11 Putting you first Page 12 Why choose us? Page 13 Let s recap Page 14

3 Do any of these statements sound like you? If so, you might want to think about investing in our Wealth Management Portfolio. I m a higher rate taxpayer and I m looking at tax-efficient investment options to complement my retirement plans. What other choices do I have? Read An overview of our Wealth Management Portfolio on page 4. I m looking to invest in a tax-efficient investment. Not just now, but in the future as things change. It would also be reassuring to know I can invest but take money out when I need it. Read Tax-efficient and you re in control on page 6. I want to be able to invest in different funds and make the most of any opportunities to grow the value. It would be good to have a wider choice and the flexibility to change investments as my circumstances and attitude to risk changes. Read Your investment choice on page 8. My assets will be worth over 325,000 and I know I could face a tax charge. I want to put the right arrangements in place to reduce any inheritance tax and to benefit my children. Have a look at Protecting your estate from inheritance tax on page 10. I ve always dreamed of living or retiring abroad, but I m worried about what would happen to my investments and the tax I d pay. If there s an investment option that helps with that, I d be interested. Find out more about Living or retiring abroad on page

4 An overview of our Wealth Management Portfolio Here s a brief look at investing offshore and more about the Wealth Management Portfolio. Investing offshore Some people believe investing offshore is only for the very wealthy, or is expensive or complicated. But this simply isn t the case. Investing offshore is very much a mainstream option, which your financial adviser will consider alongside other solutions like pensions and ISAs. The reason for offshore being considered mainstream is that the tax benefits can be very beneficial. And the wide investment choices open up new opportunities for growth. Our cost-effective bond offers you all of this and more. Control your tax When deferring tax, an offshore bond can enable you to reduce the tax you pay on your investments. Grow your money Offshore bonds offer a wide investment choice with the potential to grow your money. Protect your estate Use an offshore bond with a trust to mitigate potential inheritance tax bills or to give money to your family. Move abroad with confidence If you re planning to live or move outside the UK, we ve taken steps to ensure that our free European portability option complies with regulations in France, Spain and Italy. 04

5 More information about the Wealth Management Portfolio Our Wealth Management Portfolio is an offshore bond that lets you make a single contribution and invest in a wide range of assets. The value of the bond can grow virtually free of tax as it benefits from being established in Dublin. You can take out a Wealth Management Portfolio bond if you re aged 18 and over. The minimum initial investment amount is 15,000. If you invest 75,000 or more you ll have full access to the wide range of assets available to you. Unlike some other investment options or investing directly, you can switch investments within your Wealth Management Portfolio without being charged any capital gains tax. This makes it really tax-efficient, especially if you re actively managing your portfolio of funds. We can facilitate payments to your adviser from your Wealth Management Portfolio. We call this adviser charging. Please see the Key features of the Wealth Management Portfolio or speak to your financial adviser for more information on this. You can make extra investments of 5,000 or more You can set it up on a single- or jointlife basis A strong, regulated business You can be confident that we re a leading and experienced financial services provider, with strong regulatory controls that help protect your investments. As we re based in Dublin, we operate within both the Irish and European regulatory frameworks. We re authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority for the conduct of business in the UK. We ve measures in place to protect your investment and, as a UK resident, you ll be covered by the UK s Financial Services Compensation Scheme. Read on to find out more about who we are and the benefits of investing in our Wealth Management Portfolio. 05

6 Tax efficient and you re in control Our Wealth Management Portfolio lets you invest in a tax-efficient way and gives you the control you want, when you need it. Here s a summary of how the tax works. Virtually tax-free growth Income received from the investments in your Wealth Management Portfolio won t be subject to income or capital gains tax in Ireland. So unlike an onshore bond, this gives your fund the potential for better growth. How does this work? Offshore bond Amount = 500,000 Investment in fixed interest assets Return of 5% each year over 10-year period Distributions received are gross of tax Value after 10 years = 814,447 Onshore bond Amount = 500,000 Investment in fixed interest assets Return of 5% each year over 10-year period An onshore bond is deemed to have paid tax at the basic rate of 20% Value after 10 years = 740,122 As you can see from this example, the growth in an offshore bond is 74,325 higher than the onshore bond. Of course, you may pay personal income tax when you take money from your bond, but the increased growth could be of benefit especially if you re planning to: n put your investment in a trust for inheritance tax planning reasons n live or retire abroad to a country with lower rates of tax on taxable income 06

7 Timing the tax You can choose when to take some or all of your money out of the bond, so you can decide when you ll be taxed. The tax you have to pay at this point will depend on your highest tax rate at that time. This means you can put this off until a time when you re not a taxpayer, when you re in a lower tax bracket or if you move to another country where tax rates are lower. Taking money out when you need it You can take 5% of your original premium every year for 20 years without an immediate tax charge. You can choose to take regular or one-off withdrawals at any time, as long as you ve enough money in your bond to cover them. And if you don t use your full allowance (5% a year), you can carry the remainder forward to use in following years. Taking more than 5% will result in a chargeable event. This means you might become liable for income tax for that year. You can cash in your whole bond at any time. But if you choose to invest in funds that can only be bought and sold irregularly, you may not be able to get your money out straightaway. And remember that cashing in your bond could result in an income tax liability. No capital gains tax Capital gains tax can arise when you buy or sell shares or a unit trust directly. If a gain arises on the transaction you may have to pay tax. If you or your adviser intend to actively manage your portfolio, you ll be pleased to know that you can switch between funds at any time within a bond without worrying about capital gains tax. Simpler tax returns Our Wealth Management Portfolio is non-income producing, so you don t have to report anything on your income tax returns until a chargeable event happens. If you do, you only have one entry rather than report different amounts if you ve invested in several different assets. This makes your paperwork more straightforward. Any reference to tax is based on our understanding of current tax law and practice in the UK and Republic of Ireland, which might change. The amount of tax you ll pay will depend on your individual circumstances. 07

8 Your investment choice You can choose from a wide range of assets for a truly flexible investment strategy. When you choose a fund or tailor a portfolio of funds to invest in, it s important to select a strategy that will help meet your objectives, balancing the return you want with the risk you re willing to take. One of the key benefits of investing in our Wealth Management Portfolio is the wide range of assets you can choose from to help grow your lump sum. These can include: n authorised UK unit trusts n approved UK investment trusts n open-ended investment companies (OEICs) n certain non-uk collective investment schemes, acceptable under the UK personal portfolio bond tax rules n cash deposits and structured deposits If you invest less than 75,000 you can still benefit from our Wealth Management Portfolio and have access to our Portfolio funds managed by some of the best-known and most experienced fund managers in the industry. To find out what funds are available visit our website 08

9 Discretionary fund managers You can also ask us to appoint a discretionary fund manager (DFM) who can offer an investment service making the investment decisions on your behalf. We ve arrangements with a number of DFMs and it s up to you if you want to use one. If you do, your financial adviser will be able to help you find the right one. The value of your investment can fall as well as rise for lots of reasons, for example market and currency movements. You might get back less than you originally invested. 09

10 Protecting your estate from inheritance tax Investing in our Wealth Management Portfolio can help you plan well to reduce any inheritance tax bill or to give money to friends or family. Inheritance tax Inheritance tax is often called a voluntary tax. The reason for this is that if steps are taken early enough it s possible to reduce or even mitigate your tax liability completely. Under current UK tax legislation, assets above the inheritance tax nil rate band may be liable to tax. The nil rate band is currently 325,000. Let s say you re looking at providing some security for your children or grandchildren who are buying a new home, having a baby or going off to university. If you had assets of around 750,000 then 425,000 would be taxed at a 40% tax rate. That s tax payable of 170,000. This would be a huge amount that couldn t be left to them. The good news is that there are ways to protect your estate and reduce inheritance tax and in addition, placing your Wealth Management Portfolio in trust is also an effective way to transfer wealth. Trusts A trust is a way of holding assets for your own or someone else s benefit, your children for example. The trustees legally own and control the investment in trust, but the beneficiaries are the people who can benefit from it. People often use trusts for inheritance tax planning. Holding your Wealth Management Portfolio in a trust can provide lots of benefits for preserving your wealth or passing it onto your children. In addition trusts can also provide you with: n a regular income n access to the capital n control as to who and when someone can access the trust fund You can find more information at aegon.ie/investingoffshore/inheritance-tax-planning/trust-range/index. htm, but inheritance tax planning and trusts can be complex. It s best to speak to a financial adviser to help you understand everything you need to know. 10

11 Living or retiring abroad? Our Wealth Management Portfolio can be a tax-efficient choice even if you move to France, Italy or Spain in the future. Many people have dreams of living, working or retiring abroad. Our European portability option lets you keep income tax efficiency if you re planning to or might consider living in France, Italy or Spain in the future and want to take your Wealth Management Portfolio with you. This option is free of charge. We ll give you ongoing help and calculate any potential taxable gains after you take a withdrawal from your Wealth Management Portfolio while you re living in one of these countries. If this is something you re thinking about, ask your financial adviser for the relevant country checklist. You can find more details on our website but we strongly recommend that you speak to your financial adviser and, where appropriate, get advice from a tax specialist before you choose the European portability option. 11

12 Putting you first We always aim to give you the best customer service possible, and you ve access to our online services any time you like. Customer priorities We do our best to beat your expectations in every way we can through our customer priorities. These are to: n provide the right products and services for you n give you a high-quality service n always treat you fairly in all our dealings with you n make it easy to do business with us Online services Get details about your bond any time that suits you with Plan View, our secure online service. You can: view your latest portfolio valuation see a description of the assets you hold and the balance on your cash account access all of your yearly and quarterly valuation statements view cash account transactions see details of your bond terms, including the charges view a summary of your contributions and any withdrawals paid to you access your policy conditions document change your contact details Once your Wealth Management Portfolio is set up for you, to register for online services, all you need to do is visit our website and follow the instructions. 12

13 Why choose us? Here we explain a bit more about Aegon and why you can rely on us to protect your investment. Who are we? We re part of Aegon N.V., an international life assurance, pension and asset management company based in The Hague. We opened our office in Dublin in 2002 as we identified that an Irish base has lots of benefits for developing propositions for customers in the UK. These include a strong regulatory framework, beneficial tax regime and motivated, skilled employees who provide excellent customer service. Protecting your investments As well as having strong internal controls, we operate within both the Irish and European regulatory framework. Here s a summary of the main ways we look after your investments. Regulation We re authorised by the Central Bank of Ireland, and subject to limited regulation by the Financial Conduct Authority for the conduct of UK business. We also act in line with the European Life Directives. Independent custodian Although we don t have to appoint a third-party custodian who s responsible for the safekeeping of assets, we do use an independent custodian to hold most of our bondholder assets, to keep your money as secure as we can. Segregation of assets Bondholder assets held are ring fenced and only available to bondholders if we were to wind up. Bondholders are treated as super-preferential creditors ahead of all creditors under the European Communities (Reorganisation and Winding-Up of Insurance Undertaking) Regulations Financial Services Compensation Scheme If we become unable to meet our liabilities and you re habitually UK resident when the bond starts, you ll be covered by the provisions of the Financial Services Compensation Scheme (FSCS) in the UK. You can find more information about the FSCS at You can find more information in our Helping protect your investment leaflet. 13

14 Let s recap There s a lot to think about and these are important decisions. Here s a quick summary of the features and eligibility criteria of the Wealth Management Portfolio. Our Wealth Management Portfolio could be right for you if you: n are aged 18 or over n have at least 15,000 to invest but remember there s no maximum and you can invest extra single sums of 5,000 or more n might want to take regular or one-off withdrawals to maximise tax efficiency or mitigate any potential tax liability n want to be able to access your money if you need it n want a flexible investment choice n want to use it to protect your estate from inheritance tax n are considering living or retiring in France, Italy or Spain n want to invest with a financially strong and regulated company If you don t meet the eligibility criteria or the features don t appeal, then our Wealth Management Portfolio may not be right for you. It s essential you speak to a financial adviser as they can provide you with our Key features of the Wealth Management Portfolio, which clearly explains the product s aims and risks, and gives you more detail on how it works and what you can expect from us. They ll also give you a personal illustration. 14

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16 As Lead Partner of British Tennis, Aegon is helping to transform the future of the sport by supporting young talent, national teams and events throughout the country, including the Aegon Championships at The Queen s Club. Find out more at aegontennis.co.uk Aegon is a brand name of Aegon Ireland plc. Aegon Ireland plc, registered office: 2nd Floor, IFSC House, Custom House Quay, Dublin 1, Ireland. Registered in Ireland (No ). Authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request. An Aegon company Aegon Ireland plc C DUB /14