Portfolio Investment Plan

If the shares are held outside of an ISA wrapper, the income is potentially subject to income tax, as follows:

Gilt & Corporate Bond Fund

The income is paid to you net of 20% basic rate tax.

• Non-taxpayers can reclaim the 20% tax paid to the extent that is within their personal allowance
• Individuals paying income tax at the 10% savings rate can reclaim 10% to the extent that the income is within the 10% savings tax rate band
• Basic Rate taxpayers have no further tax to pay, provided that their total taxable income is below the higher rate threshold
• Currently, higher rate taxpayers will have a further 25% tax to pay on the net income received (20% of the gross income)
• 50% taxpayers will have a further 37.5% tax to pay on the net income received (30% of gross income)

UK Equity Income Fund

The income is paid to you as a share dividend, net of a 10% notional tax.

• Non-taxpayers and 10% taxpayers have no liability to tax on the income, but cannot reclaim the notional 10% paid
• Basic Rate taxpayers have no further tax to pay, provided that their total taxable income is below the higher rate threshold
• Currently, higher rate taxpayers will have a further 25% tax to pay on the net dividend received (22.5% of the gross dividend)
• 50% taxpayers will have a further 36.11% tax to pay on the net dividend received (32.5% of the gross dividend)

Capital Gains Tax (CGT)

Any gain made when an individual sells shares in an OEIC is potentially subject to CGT at 18% or 28% depending on your individual circumstances. However, each tax year individuals have an annual exemption, and total gains from all sources up to this limit is tax free. In 2011/12 the exemption is £10,600.

This information is based on current legislation and the figures applying in the 2011/12 tax year and may change in the future.