Discover the zero's hidden story

Article Abstract:

Zero dividend preference share do not pay income but have a pre-set capital redemption value. They are a low-risk form of investment that is comparable with government securities and other types of bonds. Income tax is not payable because dividends are not paid though capital gains tax is levied on differences between prices paid and redemption values. Investors can use their capital gains allowance to obtain tax free returns from this type of investment.

Personal Tax Planning, Personal finance, Zero coupon securities

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Unit trusts

Article Abstract:

UK investors could use unit trusts as part of a personal equity plan (Pep) using a full limit of 6,000 pounds sterling from 1992. The limit was increased in that year from 3,000 pounds the previous year. Unit trusts have become increasingly popular since 1992, despite a poor performance for financial markets in 1994, and they are the biggest type of Pep. UK Equity Income is the biggest category, followed by UK General funds and UK Growth funds.

Investment Offices, Investment Companies, Open-End Investment Funds, Mutual funds

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