hit counter
The Informed Investor
Website:  www.ukinformedinvestor.co.uk
Welcome to The Informed Investor.  Press Control+B to Bookmark this site for later reference.
Informed Investor  Golden Services
USA Peoples Search
USA Business Search
U S A Yellow Pages
People Search


Informed Investor Search Powered by Everyone.net

24 hour Hotline  Hotline
Fax : +44(0) 845 862 1954
WAP Site: http://wap.pyweb.com/ukinformedinvestor.wml
or WAP Site: http://www.wapdrive.com/drummondco/
NOTICE: In regards to the Direction by The Chancellor of The Exchequer, Hovis, all tax avoidance plans are being operated by an off-shore company and are created in consultation with the clients as one - off plans for that client only. Most of the plans listed below are now defunct but give an idea on the type of plans we have been writing since 1966. Drummond & Co will be pleased to introduce those interested in Tax Mitigation to the off-shore company, who are under no obligation to the Inland revenue.
For the information of the Inland Revenue you can read up on all the plans we utilise by reading the Statutes of England and Wales. They are all in there.

Masked Account


As part of Drummond & Co's 
quest for efficient vehicles to 
mitigate taxation we recommend 
that professional financial advisers consider the use of  THE CAPITAL REDEMPTION POLICY to mitigate both Capital Gains and Inheritance Tax. It can also be used as a more proficient way to mitigate Income Tax & National Insurance Contributions. These policies are little known, but extremely useful in the field of tax mitigation.
Drummond & Co give NO INVESTMENT ADVICE, their field is tax strategy and mitigation. For an introduction to a lawyer who can advise and/or taxation advice call on :

or fax on:
    Fax : +44(0) 845 862 1954


" Nothing is more certain than death and taxes" - Benjamin Franklin

Mr Franklin may well have been right but the certainty that one leads to the others has been challenged for many years. Not only that but the accepted natural consequences that investment profits and gains, especially those generated by our own efforts, fall to be taxed is continuously scrutinised by the legal and accounting professions. With significant success.

The legitimate reduction or elimination of taxes and duties which become payable on crystallising gains or death has been a professional preoccupation for many years. 

The widely held view is that such revenues are unfair because the wealth has been created by sheer hard work, and that the tax has previously been paid on the capital or assets.
Various governments have addressed these issues with the results that, whilst retaining the taxes, they have made them eminently avoidable through pre-planning.
This is the position today with the current taxes, capital gains tax and inheritance tax.
Inheritance Tax applies to the estates of UK domiciled individuals or foreign nationals who have UK based assets. However, by using the pre-death gift  allowances, known as Potentially Exempt Transfers or PETS for short, much of the tax liability can be reduced or completely eliminated. Whilst PETS are a popular facility the fact that many people do not use them is evidenced by the amount of revenue raised by the Exchequer in Inheritance Tax. Some £1.5 billion in 1995-1996.
Further, there is a current concern that the change of the UK government could lead to the rapid abolition of PETS. The Capital Redemption Policy makes no use of PETS.
applies to investment gains and profits, including the sale of private businesses. There are a significant number of exceptions and, over time, the ability to index original values has gone some way to mitigating the effects of the tax. Annual exempt allowances are also available for people who regularly realise gains. However, it is still very much the case that many transactions are subject to CAPITAL GAINS TAX, which can easily take 40% of the profit.  To some extent CAPITAL GAINS TAX and Inheritance Tax are mutually exclusive in that CAPITAL GAINS TAX does not apply to gains realised on death, but of course Inheritance Tax can simply replace it with the same overall effect.
There are many reasons why PETS are an awkward solution. For example, giving your assets away will mean losing control over them and, perhaps more importantly, losing the income they generate. Your intended recipients may not be ready or capable of taking control of the assets. Or , by giving the assets away you may plan to save Inheritance Tax but simply crystallise a liability to Capital Gains Tax.
CAPITAL GAINS TAX and Inheritance Tax are not crucial to the well being of the UK economy. The creation of wealth is vital for the UK economy. the majority of thinking people believe that their wealth should remain as far as possible in their hands or the hands of their family, colleagues or companies that contributed to its creation in the first place.


E-Mail : 

For further details on legal, taxation and non FSA advice
on this page Contact:


+44(0) 709 217 5220
Fax : +44(0) 845 862 1954

is the UK financial services industry net directory. 

It is an award-winning site which links directly to over  3000 UK financial services companies.


Tell A Friend about 
Type In Your Name:

Type In Your E-mail:

Your Friend's E-mail:

Your Comments:

Receive copy:

It is  such individuals that the Capital Redemption Policy will be of substantial use.
It enables them, at rates which have been accepted by the Inland Revenue, to:
  • Reduce or eliminate their Inheritance Tax and Capital Gains Tax liabilities immediately, without gifting their or therefore using PETS. 
  • To secure a continuing source of benefit from the assets. 
  • To remove future liabilities to gains, profit or growth taxes on the assets and any income or value they generate. 

  • The Capital Redemption Policy is straightforward to establish. The range of acceptable assets to invest in, including private shares, land and property, and to retain is exceptionally wide. The benefits are proven.

    A Capital Redemption Policy is a capital redemption contract issued in exchange for the payment of a premium. The premium may be cash, an existing share, unit trust or bond portfolio, unlisted securities such a private company shares or other property.
    Capital redemption policies fell out of favour in the UK in 1938. Before that, they were a common product issued by most established UK life assurance companies. However, they remained in use on the Continent and following the European Union's First Life Directive in 1981 were re-established in UK life assurance and tax law. They offer many  advantages over traditional insurance contracts and, when allied to our unique structure, very significant tax planning opportunities.
    An Account is created within the Endowment Company's capital redemption business fund to measure the benefits payable under each policy from those of other policies. This creates the link between the value of each policy and the assets identified with it. As the value of these assets will fluctuate due to movements in the markets, or currency exchange rates if appropriate, so the day to day value of the Capital Redemption Policy will vary. However, it does have a guaranteed minimum maturity value.
    The terms of the CAPITAL REDEMPTION POLICY are that its duration to maturity, when it distributes the assets related to its final value, is any term you choose between 2 to 80 years. On maturity there is a guaranteed minimum value, which is established at inception, or the current Account value, whichever is the greater. The guaranteed value will depend on the term selected and the value of the initial premium. In the interim period the original owner has no right to encash the policy or receive the guaranteed value ahead of the maturity date. But, as a CAPITAL REDEMPTION POLICY is not dependent on the life of the owner, there is no medical underwriting to set one up nor is there any pay out on death.
    As there is no right to encash the policy before its maturity date the Capital Redemption Policy is valued by reference to the market value, from time to time, of the right to receive the future minimum guaranteed maturity value, NOT the initial premium paid. The value of the right to receive this guaranteed value is discounted over  the period from inception to maturity.
    For example, a premium of £100,000 would give a minimum  guaranteed maturity value over an eighty year term of £700,000. The fact that real investment performance over this period would hopefully generate a higher value is ignored as performance can fluctuate. The right to receive £700,000 in eighty years time is worth today, on the basis of a gross interest return of 6% p.a., £6,801.
    Similarly, there is no right to regular withdrawals from the funds within the Capital Redemption Policy, though there is an interest-free loan facility to ensure that moneys can be made available as and when they are needed. Loans are deemed to be withdrawals for UK income tax purposes, and are repayable on demand.
    You can appoint a Patron who has the power to monitor the activities of the Endowment Company. This added comfort ensures that you are fully informed at all times through the offices of the Patron, of all actions and transactions related to your Capital Redemption Policy.
    A CAPITAL REDEMPTION POLICY is not a policy of Life Assurance or a life annuity. Accordingly there is no life assurance mortality risk to consider. This makes the Capital Redemption Policy very suitable for those who are not in good health or may have left it late in seeking to reduce capital taxes. No underwriting at all is required.
    The policy is a valuable asset as it replaces in full the value of the Moneys or assets transferred to the Endowment Company by way of Premium. However being a capital redemption policy rather than directly owned shares or deposits for example, the taxation treatment of growth and income within the linked fund, and benefits from the policy, is distinctly advantageous 


    In transferring the premium to the Endowment Company and receiving a Capital Redemption Policy in return you are in fact substituting a new, single asset for your current assets. The existing block of assets has created current or potential tax liabilities leading to income tax on interest dividends or other income arising; capital gains tax on growth in value of certain of the assets and possible inheritance tax liabilities when you eventually die and leave your estate to beneficiaries.

    The new asset you receive in return is completely different. It is a policy issued by an Endowment Company which is linked in value to a Special Account. For example, because the value you have transferred is now within a CAPITAL REDEMPTION POLICY, which cannot be accessed during the term of each policy, the value of the policy is discounted at a rate which has been previously accepted by, and agreed with the UK revenue. Just as the redemption value of certain long-term , Government gilt-edged securities trade at well below their par value, so the current discounted value of your capital redemption policy is well below the value of the assets identified with the linked fund. This discount basis will substantially reduce the Inheritance Tax liability on your death. The basis of discounting and the fact that policies of capital redemption are subject to Capital Gains Tax additionally means that CAPITAL GAINS TAX on the transfer can also be significantly reduced.
    Using the figures previously described the transfer of £100,000 of assets pregnant with the gain leads to an immediate discounted value of £6,801.

    The transferred assets form part of the Assurance Company's long  term funds and thus the taxation treatment of the Endowment Company is " wrapped around" your recommended investments. This tax  treatment currently means no liability to corporation tax on income and gains arising within the funds. Your fund essentially can grow in value on a tax free basis.
    In the meantime, you have secured access to Moneys which can effectively be structured on a tax free basis. Through the Patron you can constantly monitor the performance of the Account, and the Endowment Company. You can indicate in your will, as the CAPITAL REDEMPTION POLICY is your asset what you wish to happen after your death.
    If the Capital Redemption Policy is in your personal ownership, rather than through a company or trust, it will be valued at death, a gain on a discounted basis, and the resulting value will form part of your estate for Inheritance Tax purposes. For example, if death occurs 10 years from inception, and there is a remaining term to maturity of seventy years, then using our previous example the value attributed at death will be £11,512.
    Ultimately the Capital Redemption Policy will mature at your chosen period from inception. The maturity value will be either the minimum guaranteed value or the value of the linked account whichever is the greater. Under current and proposed legislation, this maturity value can be substantially tax free but you in mind that tax rules can and may  change.

    An example may help to explain the attributes of the Capital  Redemption Policy. Mrs. Brown is a widow aged 65. Her husband died two years ago and left his entire estate to her. Her assets are now worth £1 million and comprise of her home valued at £195,000, a savings account with a Building Society worth £55,000, an investment portfolio recently valued at £250,000 and shares in her late husbands business valued at £500,000. The gain on the investment portfolio and private shares is £600,000.
    The Inheritance Tax liability on Mrs. Brown's estate is currently £314,000. That is, 40% of £785,000 in excess of the present nil rate band £215,000. Mrs. Brown consults her professional adviser and here commends that she consider the Capital Redemption Policy. She  decides to invest £750,000 being the investment portfolio and her private shares.
    She selects an 80 year term to maturity Capital Redemption Policy with a guaranteed minimum value of seven times the initial value  transferred. That is £5.25 million. The open market value of the right to receive £5.25 million in 80 years time is today valued at £51,000.

    The value of the assets transferred were £750,000 including gains of £600,000. The Immediate open market value of the asset received in exchange is £51,008. Accordingly no CAPITAL GAINS TAX is payable.

    The transfer is NOT a Potentially Exempt Transfer. But if Mrs. Brown dies in 10 valued at that time as an asset of her estate. It will still have an unexpired duration of 70 years before the minimum value is available so the value in ten years time is estimated to be £86,340. Assuming her house and Building Society Account appreciate with inflation and absorb the entire nil rate band, this would lead to an INHERITANCE TAX liability of £34,536 at present rates. This compares with the present situation of a liability of £314,000 if no action is taken. remember also that CAPITAL GAINS TAX on the disposal has been significantly reduced.


    The premiums for a Capital Redemption Policy can only consist of assets other than cash premiums. Such Moneys must be paid in the first instance to an Assurance Company who can then pay on such Moneys to the Endowment Company. The Lawyer concerned  can identify Assurance Companies which are currently writing Capital Redemption Business. but these are very few.


    The Lawyer concerned is in possession of legal opinion on this scheme but will only show it to prospective clients and will not allow copies for distribution.

    Free Money24 hour Hotline  Tel:Hotline
    13 Nottingham Place, London, W1U 5LE
    Fax : +44(0) 845 862 1954

    If you are seeking a Non Status on-line account we recommend you apply for a PayBox.me Account. You get $50 for joining and up to $20 a day added during launch. You can also earn by recruiting others.

    YOUR $50 FREE


    If you have a Tapaz ID you can request more information on Capital Redemption Policies, by entering your ID and pressing Tapaz.

    BannerMall.com - Free TargetedAdvertising
    Taper relief/indexation
    The chargeable gain is computed by deducting indexation allowance for periods of ownership prior to 6 April 1998 and for taper relief thereafter. 
    The rate of taper relief is different for business and non-business assets. As non-business asset taper relief is ineffective for ownership periods of less than 3 years, and as some asset disposals are identified on a last in first out basis, you may consider investing through a collective investment scheme or an investment trust. 

    Where assets have been received by way of a gift and subjected to holdover relief then the ownership period commences from the date of the transfer. Any accrued taper relief is lost. The timing of any disposal, the person making the taxable disposal and the period of ownership will have an effect on any potential tax liability. As the effect of full business taper relief is to reduce the effective tax rate down to 25% of the nominal rate ( i.e. to as little as 10% for a higher rate taxpayer), it is an extremely valuable relief. 

    There are to be changes in the budget that will result in full taper being available after 5 years. However it is not known whether the enhanced relief will apply to all business assets or only to those acquired after a set date. Non business taper is expected to continue to be available over 10 years, giving a maximum reduction of 40% i.e. an effective maximum rate of 24%.

    Annual exemption/tax rate

    Each individual is entitled to an exemption from tax on chargeable gains of up to £7100. Assets held in a bare trust for a child are treated as belonging to the child and the child's annual exemption and basic rate band is available in taxing any gain arising on a sale. The ability to use the child's personal allowance for income tax with a bare trust was removed last year. 

    Gains in excess of £7100 are liable to tax at 20% or, for higher taxpayers, 40%. You may consider crystallising a gain to use the annual exemption, or a loss in order to use the relief, by selling and buying back the asset. 

    There are, however, complicated rules that govern the identification of sales and acquisitions of stocks and shares which need to be taken into account. Trusts are entitled to a lower tax exemption ( generally £3550) and most are liable to tax at 34%. It may be possible to use holdover relief for gifts to individuals and trusts in order to realise a gain at a lower rate of tax. Clearly taper relief may be extremely valuable and care is needed to ensure that the ownership period is not effectively reduced.

    Principle Private Residence (PPR) relief
    Each married couple is allowed an exemption from capital gains tax on the disposal of a property occupied throughout the period of ownership. If you occupy more than one property it is possible to nominate that which is to be regarded as the PPR by making an election. This has to be done within two years of acquiring the alternative residence. A property owned by a trust, but occupied by a beneficiary as a main residence, may also qualify for relief. The last three years of ownership are always to be regarded as a period of occupation. This may allow some planning to be undertaken in order to provide relief for what has generally been an investment property.

    Hold - over Relief

    Gains can be held over in a number of circumstances. For business assets, relief is available where replacement business assets ( property, goodwill, etc.) are acquired. Relief is also available on the incorporation of a business.

    For assets generally, it is necessary to subscribe for shares in a qualifying company or a venture capital trust ( subject to certain monetary limits). In addition to providing for deferral of the capital gains tax charge, at up to 40%, there may also be an income tax reduction of 20% where the company qualified under the Enterprise Investment Scheme or as a Venture Capital Trust. Gains arising on gifts of business assets to individuals, or on the transfer of any asset into a discretionary trust, can also be held over. In the November pre-Budget report it was announced that it is no longer possible to holdover a gain on certain gifts into a company. Gifts to charities are free of capital gains tax. From April 2000 you should be able to make a gift of quoted shares to a charity, avoid any capital gains tax and get income tax relief on the gift.

    Retirement Relief

    Where the taxpayer is at least 50 years old, part of the gain on the disposal of an interest in a business, or shares in a personal company, may be free of capital gains tax. The relief is being phased out over the next three years; for disposals before 6 April 2000 the exclusion is £200,000 plus half the excess up to £800,000. The balance qualifies for taper relief. A deemed disposal can be engineered through a transfer into a trust.


    The date of contract is normally taken as the date of disposal unless the contract is conditional, in which case it is when the condition is met. It may be possible to defer the date of a disposal, and thus the due date for the payment of tax, through the use of conditional contracts or options. If this is of interest you should take professional advice to ensure that the arrangements are implemented effectively.
    Labour governments have often favoured a tax on death and on capital transfers. Whilst generating relatively little tax, it looks increasingly likely that inheritance will not be strengthened until after the next election.

    There are, however, features that may be curtailed. In last year's Finance Act, the ability to gift an interest in a residence, whilst continuing to live in it, was severely restricted.

    It is important to note that the basis of valuation for IHT is the "loss to the donor" rule i.e. how much worse off the donor is, not how much better off is the donee. It is also important to note that property owned by the husband and wife may be related for valuation purposes.

    Although transfers between UK domiciled couples are exempt, husband and wife are regarded as separate persons and have their own reliefs and exemptions. In appropriate circumstances the reliefs may be doubled up by husband/wife transfers followed by a gift to the intended beneficiary.

    Exemptions and Reliefs

    A very useful relief, for those with surplus income, is that for normal expenditure out of income. The gift should leave the donor, over a period of time, with sufficient to maintain their normal lifestyle. However, a pattern of behaviour needs to be established in order that the expenditure can be regarded as normal. For substantial, ad hoc gifts, the potentially exempt transfer (PET), which becomes exempt provided the donor survive 7 years is considered to be very generous as there is no monetary limit and the gift can be into certain trusts. Last year, a requirement was imposed on executors to report the value of gifts made in the 7 years prior to death.

    Monetary limits may be introduced in relation to PET's and the survival period could be extended. For smaller gifts the annual exemption of £3000 ( which may be carried forward one year) should be used regularly.

    A  labour spokesman has said that the nil rate band ( currently £231,000) is considered to be reasonable in the context of the current rate structure. A lower limit may, however, be introduced together with a lower tax rate for modest transfers. The nil rate band is particularly useful in the context of transfers into discretionary trusts, especially as capital gains tax holdover relief may also be available. This relief could well be removed.

    The 100% reduction in value for the transfer of some business and agricultural property has often been suggested as being extremely generous, especially as there is no capital gains tax on assets owned at death. One or other could be restricted.


    Whilst it is, at present, possible to vary the way an estate is distributed, it may not be practical to do so. All parties affected must agree to do so within two years of the date of the death. Where infant children or charities are beneficiaries, the problems multiply. Further, the ability to vary a will has been challenged in parliament in the past and the tax efficiency of doing so may be curtailed in the future. The most sensible course of action is for taxpayers to ensure that they will have a will and to continually review their circumstances and the consequences of leaving a will unamended.

    The Informed Investor
    List of Interesting UK Sites 
    Click on to the exact word
    Business UK
    Reference / Education
    Shopping UK

     At £4.99 Go out & Buy Computer Active's Book on Websites-
    It's well worth the money

    Annuities Bordeaux Managed Wine Investment Plan Bordeaux Wine News
    Business Health Check up Business Search Capital Gains Tax Mitigation
    Capital Redemption Policies City Watchdog Corporate Future Profits Plan
    Computer Tips Computer Training Croxtons Carpet Scheme(NIC)
    Croxtons Grapevine Scheme(NIC) Day Trading Debt Problems & Bankruptcy
    Downloads Employee Benefit Trusts Film Investment
    Freeware Gizmos Good Deeds
    Heartrendering Income Tax Mitigation Inheritance Tax Mitigation
    The Language of the Wine Label The Brewery Net Page  Offshore Cyberspace for E-Commerce & Day Trading
    Offshore Tax Opportunity OY-VEY Jewish Jokes Patti's Fun page
    Pensions & Retirement READERS OWN PAGE Residential Property Investment
    Search Engines List Telecommunications Cost Reducer Truman Brewery media directory

    Useful Web Sites Wineline-Buy & sell Wines on line
    The Informed Investor is prepared in the Netscape Navigator format and may look lopsided in Internet Explorer or Opera browsers. We apologise for any inconvenience
    Click here to go to :

    This site is Netword enabled.

    Enter a Netword
    Get about the Netword

    This site's Netword is 
    Tell your friends.


    Looking for Something ?  Click on these search engines 
    Alta Vista Alta vista is a search engine, reinvented as a Web portal.
     By incorporating regular news services, email and shopping they
     have increased their functionality and stickiness ten fold.http://www.altavista.digital.com/
    Apollo (web advertising Catalogue)UK http://apollo.co.uk
    Ask Jeeves Ask Jeeves is a second generation engine. Instead of searching based on keywords, it attempts to answer your questions.
    BizAds Business Locator http://bizads.2cowherd.net/
    Bluechip http://www.bchip.com/
    Britannia http://www.microspy.com/britannia
    Business Online is a very powerful business tool which contains news, directories, classifieds, articles, databases, international buyer-seller connections and BizWiz http://www.clickit.com
    City Pages (UK) http://www.citypages.co.uk
    Comfind-business directory http://comfind.com/
    Euroseek http://www.euroseek.net/page?ifl+uk
    Excite http://www.excite.com
    Fast Search The largest spider is Fast Search which indexes around 200 million web pages. It is very speedy.http://www.alltheweb.com
    Findlink http://www.findlink.com
    Directoryfind is the UK financial services industry net directory.  It is an award-winning site which links directly to over  3000 UK financial services companies.
    Google A novel approach- it looks at the results of other search engines and takes notes of the links people have followed. 
    Hotbot Hotbot is a spider which offers some particularly nice search tools. By playing with the options available at the left hand side of the main page you can be very specific about the sort of results you want.
    Humor Search Comedy Search Engine http://www.humorsearch.com/
    Inc.co.uk/index (UK) http://www.inc.co.uk/index
    Infoseek http://www.infoseek.com
    Inktomi http://inktomi.berkeley.edu/query.html
    Internet Sleuth http://www.isleuth.com/
    Jayde http://www.jayde.com
    Looksmart http://www.looksmart.com/
    Lycos http://www.lycos.com
    Magellan http://www.mckinley.com
    Mamma Mama is a metacrawler- it runs your keyword through a number of spiders and collates the results
    March Search(UK) http://www.march.force9.co.uk
    Matilda (Australia) http://www.aaa.com.au/
    Metasearch http://www.metasearch.com
    Microsoft MSN  Is this a monopoly?
    Money-Search Geared to small businesses & investment
    Nerd World Media http://www.nerdworld.com
    Netscape Search http://home.netscape.com/bookmark/4_08/netscapesearch.html
    Netword http://www.netword.com/
    OneCenter http://www.OneCenter.com
    OpenText http://www.opentext.com
    PedagoNet- Geared to teaching and learning sites http://www.pedagonet.com/
    Rescue Island http://www.rescueisland.com
    WWW Riot
    The Anti-Portal: Get The Sites That You Are Looking For!
    Savvy-Search (multiple search engines) http://rampal.cs.colostate.edu:2000/
    Scoot(UK) http://www.scoot.co.uk
    Scrubby http://www.scrubtheweb.com/
    Search Europe http://searcheurope.com/
    Shopping UK  Oh dear they won't list us ! http://www.shoppinguk.co.uk
    Softsearch- Geared to finding software programmes http://www.softsearch.com
    Starting Point  ClickHEREto vote for this page as a Starting Point Hot Site
    UK Plus
    UK Taxation Directory http://www.uktax.demon.co.uk/
    USA Online http://www.virtualave.net/
    Webcrawler http://webcrawler.com
    Webseer- Searches for online pictures http://webseer.cs.uchicago.edu/
    Websurfer http://www.io.com/websurfer/
    What-U-Seek http://www.whatuseek.com/
    What's New Too! http://newtoo.manifest.com/search.html
    WWWomen- Womens issues http://www.wwwomen.com/
    WWWW (The World Wide WebbWorm) http://www.goto.com/
    Practically everyone with access to the www has used Yahoo for
     some reason or another. Initially a search engine, Yahoo is a now a
     gateway for online shopping, news, email and a whole load more.http://www.yahoo.com
    Yellow Pages http://submit-yellow.com/tattletale/


    Click Me!
    B Add Me!