Collective Redemption Bond

The Collective Redemption Bond is an offshore redemption contract, where you can invest an initial sum of at least £25,000.

A redemption bond does not have lives assured; therefore it will not come to an end on death. Instead the Collective Redemption Bond has a 99-year fixed term and your investment will continue to the end of the term (the maturity date), unless you fully cash it in before.

The Collective Redemption Bond aims to provide a flexible method of investing your money with the potential for growth over the medium to long term (5-10 years). It is designed to allow your capital to grow and to offer the option for you to take regular, tax-efficient withdrawals.

The Collective Redemption Bond offers significant investment freedom by spreading and varying your investments across a wide range of funds and/or different assets, as you wish, according to your financial goals and your attitude to risk.

This information is only intended as a general introduction to the Collective Redemption Bond. Full details of the product can be found in the Collective Redemption Bond Key Features Document and product brochure available from your financial adviser. Your financial adviser will be able to supply you with a personalised Key Features Illustration for this bond.

Benefits

The Collective Redemption Bond offers the opportunity to take advantage of several tax benefits, including arrangements that can help to reduce your inheritance tax (IHT) liability. Your financial adviser can highlight the tax issues which are relevant to you.

In addition, The Collective Redemption Bond enables you to:

• choose from many tax-efficient funds to match your investment objectives.
• consolidate your existing fund holdings into your bond (subject to our acceptance) giving you the convenience of holding all the funds in one portfolio.
• switch funds within your bond without any tax liability.
• access to your money easily, either through tax-efficient regular withdrawals of up to 5% a year of your original investment or through one-off withdrawals. If you withdraw more than 5% a year, or withdraw more over the years than you invested, you may be liable to tax.
• cash in the whole or part of your bond whenever you wish.
  We may make an early withdrawal charge under certain circumstances.
  
• write your investment under trust with Royal Skandia or Royal Skandia Trust Company, to provide effective inheritance tax planning.

Risks

All types of investment involve some risk. The Collective Redemption Bond offers you access to a wide variety of investment funds, the value of which may fall as well as rise. This means that we cannot guarantee the amount you get back when you cash in your Collective Redemption Bond, as it may be less than expected or less than you invested, for the following reasons:

Choice of funds

• The funds available all have specific objectives and associated risks, therefore their performance will differ according to the assets or underlying funds held within them.
• If you do not review and monitor the performance of the funds regularly they may fail to meet your expectations.
• If funds in your bond do not match your attitude to risk they may not perform as you anticipate.
• If a fund's underlying investments are held in a different currency to that of your bond, there may be additional risks because of exchange rate fluctuations.

Charges and withdrawals

• The effect of charges may be higher than projected. For example, you might decide to switch to funds with higher charges, or investment management costs may increase in the future.
• If you take greater withdrawals than originally planned, the value of your bond may be less then projected.

Tax changes

• Tax rules could change in the future.

Cancellation risk

• If you decide to cancel your bond within the first 30 days, we will give you your money back. However, if the value of your investment has fallen in the meantime, you may not get back the full amount you paid in.

Who is eligible?

Residents of the UK, Channel Isles or Isle of Man.

Minimum and maximum ages

Available to investors aged between 18 and 89 (inclusive).

Minimum contribution

£25,000 minimum initial single premium (or other currency equivalent).
£2,500 additional single premium (or other currency equivalent).

Term

99 years.

This web page is only intended as a general introduction to the Collective Redemption Bond. Full details of the product can be found in the Collective Redemption Bond Key Features Document and product brochure available from your financial adviser.

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Information on this website is not intended for Hong Kong residents. Information on this website about Skandia Group Companies is intended for UK residents only, unless it relates to Royal Skandia, Skandia Life Norge or Suomen Sivuliike. Skandia Group companies do not offer investment advice and no information on this website should be construed as such.

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