OUR INVESTMENT PRODUCTS

WHAT ARE SITUS ASSETS? 

• SITUS assets refer to assets held in a specific jurisdiction, in most cases the United States (US) and United Kingdom (UK). These assets include fined property, shares, tangible moveable property and registered instruments.
• The jurisdiction in which the assets are held becomes important when it comes to estate planning as inheritance tax is payable on these assets at the prevailing rates of that jurisdiction.
• In the US and UK, these rates are 40% in excess of:
  USD60,000 in the US
  GBP325,000 in the UK

WHAT IS AN OFFSHORE WRAPPER?

• It is an endowment structure on which a life is insured, allowing you to nominate a beneficiary, the person to whom the proceeds will be paid on your death. The structure runs for 5 years In the offshore world this is a major advantage, as it helps to avoid the problem of probate, the process whereby a foreign estate has to be wound up. This can prove particularly problematic.
• The endowment structure runs for 5 years, but you are able to withdraw your capital during this period.

WHY USE AN OFFSHORE WRAPPER?

• Tax Rate is favourable for High Net Worth Individuals and South African Companies and Trusts
  The Offshore Wrapper is taxed in USD not Rand
  

  	CAPITAL GAIN TAX
  	Tax Rate inside Offshore Wrapper	Tax Rate outside Offshore Wrapper
  High Net Worth Individual	12%	45%
  SA Company	12%	22.4%
  SA Trust	12%	36%

  	CAPITAL GAIN TAX
  	Tax Rate INSIDE Offshore Wrapper	Tax Rate OUTSIDE Offshore Wrapper
  High Net Worth Individual	30%	45%
  SA Company	30%	28%
  SA Trust	30%	40%

• Reduce Tax Liability on death – No Capital Gains Tax needs to be triggered
• Eliminates the need for:
  Wills in offshore jurisdictions
  Grant of Probate by offshore solicitor
  Executor Fees
• Nominate Primary and Secondary Beneficiaries (instant access to the investments anywhere in the world)
• Tax Administration
  The Life Wrapper is responsible for all Tax Reporting obligations
  The Life Wrapper takes care of all Tax Calculations and Payments to South African Receiver of Revenue
  Client need only report a one line value in their tax returns – no further obligations
  Share purchased and sales do not need to be accounted by the client for tax purposes
  Currency movement need not be accounted for by the client
  Coupon payments and dividend receipts need not be accounted for by the client

EXAMPLES
SITUS TAX
A South African investor has a UK-based portfolio comprising a bank account, property and a £900 000 share portfolio. This investor also holds similar assets in the US totalling $600 000. He would be liable for a potential estate duty payment of £230 000 ((£900000 -£325000 exempt) x 40%) in the UK, and a further $216000 (($600000 – $60000) x 40%) in the US.

These are substantial liabilities to be settled in countries in which the investor is non-resident and way in excess of the South African estate duty liability of 20%. If the investment was in an Offshore Wrapper, there would be no SITUS tax liability in the UK or US. When these benefits for SA residents are taken into account along with the tax and estate planning efficiencies of the product versus the inherent costs, they make the Offshore Wrapper a compelling alternative.

WHAT IS A CFD?
A contract for difference (CFD) is a form of derivative trading. It allows the trader to speculate on the rising or falling prices of shares and indices. The CFD involves gearing of your positions. Example. Your initial investment size will have significantly more exposure to the market than the original investment size. Ie R100000 investment size can have R300000 exposure to the market.

RISK DISCLOSURE REGARDING DERIVATIVE INSTRUMENTS – CFDs
The risk of loss arising from trading in any local or international Derivative Instrument, which includes Single Stock Futures, Index Futures, Contracts for Difference, any Yield X or SAFEX products can be substantial. The FSP will carefully consider whether the client is suitable for such instruments. You should be aware of the following points:

• • If the market moves against your position, you may, in a relatively short time, sustain more than a total loss of the funds placed by way of security deposit with any registered derivative market. You may be required to deposit a substantial additional sum, at short notice, to maintain your minimum security deposit balance. If you do not maintain your margin balances your position may be closed out at a loss and you will be liable for any resulting deficit.

• • Under certain market conditions it may be difficult or impossible to close out a position. This may occur, for example, where trading is suspended or restricted at times of rapid price movement.

• • Where permitted, placing a stop-loss order will not necessarily limit your losses to the intended amounts, for market conditions may make it impossible to execute such orders at the stipulated price.

• • A spread or straddle position may be as risky as a simple long or short position and can be more complex.

• • Markets in Contracts for Difference can be highly volatile and investment in them, carry a substantial risk of loss. The high degree of “gearing” or “leverage” which is obtainable in trading these contracts stems from the payment of what is a comparatively modest security deposit when compared with the overall nominal value. As a result, a relatively small market movement can, in addition to achieving substantial gains where the market moves in your favour, result in substantial losses which may exceed your original investment where there is an equally small movement against you.

• This brief statement cannot disclose all risks of investment in Single Stock Futures, Index Futures, Contracts for Difference and