A general term used to describe resources owned. These resources must always have a realisable value i.e. can be readily bought and sold.

A life assurance contract requiring regular contributions but which does not allow the applicant to specify the amount to be paid in the event of death. It may be Whole of Life, flexible term or fixed term and may invest in collective funds or with profits arrangements.

Fixed interest securities, long term debt securities or loans, issued by incorporated companies and governments as a means of raising money. They generally pay a stated rate of interest and repayment of the face value is guaranteed by the corporation or government on a set maturity date. They can be traded at any time. Their value will depend on (a) the fixed rate of interest compared to rates of interest available at the time of sale and (b) the market's assessment of the likelihood of full repayment. See also Investment Bond.

A “back-to-back savings plan” combining two separate plans. Investors' contributions go into a "funding" series of investment bonds. These are encashed successively, providing the regular premiums paid into a maximum investment plan. This allows short-term or lump sum savers to benefit from the tax advantages offered by a longer term regular premium life assurance plan - particularly useful for expatriates working on contract for a few years.

The real gain (i.e. profit after inflation) in the value of an asset.

A fixed term (often 99 years) specialised life assurance contract with no life assured, requiring a minimum lump sum investment.

A fund which enables participants to pool their investments and jointly benefit from profits and income arising from trading in the underlying assets of the fund. Losses are also shared. The main benefit is to smaller investors who can spread their investment among many more shares or other marketable securities, reducing risk. The disadvantage is that they will not show the spectacular gains which result from investing directly in a company whose shares multiply in value many times. Examples are unit trusts, investment trusts, managed funds, open ended investment companies and mutual funds.

Payment to an intermediary for services rendered. This is often based on the value of the investment and is often paid at a predetermined percentage rate. The commission may be paid out of the standard initial fee charged by the Product Provider or may be an additional cost for the investor to bear.

The premium(s) paid into a life assurance contract or each sum invested in other investment vehicles.

A share in the profits of a limited company paid to shareholders. It is expressed as a percentage of the nominal value of the shares. An income distribution to shareholders that generally comes from the net income of the fund. A change in the dividend rate or amount does not affect the fund's share price.

A financial product which is based and regulated in the country of residence of the investor.

A regular contribution life assurance contract with a specified term, either of a number of years or to a specified age of the life assured. There are various types of endowment policy:-

• Pure Endowment - The policy provides a sum assured which is paid at the end of the term. Under most pure endowments, nothing is paid if the life assured dies within the term.
• Non-Profit Endowment - The policy provides a sum assured which is paid either on the death of the life assured or the end of the term, whichever happens earlier.
• With Profit Endowment - The policy provides a sum assured which is paid together with bonuses accrued either on the death of the life assured or the end of the term, whichever happens earlier.
• Low Cost Endowment - The policy provides a higher level of life cover than with profit endowments for the same contribution. It combines a decreasing term assurance and with profit endowment. When used by house buyers, the guaranteed sum assured is normally set at an amount lower than the mortgage capital in the belief that bonuses added to the policy will be sufficient to make up the outstanding amount and leave a surplus to be paid to the policyholder.
• Unit-linked Endowment - The policy guarantees a minimum sum assured which will be paid in the event of death within the policy term. If the value of the units in the plan is greater that this sum assured at the time of death, the larger value will be paid. On survival to the end of the term, the value of the units is paid.

Net assets, attributable to the ordinary shareholders of a company. Equities represent a form of investment in which the degree of risk and possible of capital gain is high relative to investment in fixed-interest securities. A term used for investments, often called stocks, in a Stock Exchange listed company as opposed to Fixed Interest investments and property. Generally, preferred stock and convertible stock are also types of equity securities, but debt securities are not since they do not represent ownership.

Financial Advisors advise their clients on savings, investments, and pensions and supply financial products to their clients. The best advisors collect detailed information about their clients’ financial circumstances and requirements, provide impartial advice on the products which will best meet these, and supply these from the full range available from all sources. Advisors may need a license to practice, issued by the financial services regulator in their Country. It may be a condition that prospective advisors show their Regulator they are competent to advise, impartial in their advice, independent of Product Providers and covered by professional indemnity insurance. It is important to check that your advisor is licensed to advise and supply financial products in the Country in which they conduct their business - and to check whether he or she is an agent of just one Product Provider, a limited number of Providers or a wide range. Advisors usually earn their living from the commission paid by Product Providers. The commission they receive from a case may range from hundreds to many thousands of dollars. Good advisors are not influenced by the amount of commission they receive. Some clients prefer to pay their advisor a fee for advice as a way of ensuring their impartiality. In this case the Advisor refunds to the client the commission paid by the Provider. This refund may be in cash or, more commonly, by increasing the invested proportion of any contributions paid by the client. It is important to choose a good advisor. Ask your friends if they would recommend theirs and ensure he/she is authorised to advise you.

Countries or dependent territories whose governments have encouraged the development of a financial services industry – banking and investment management, for example – geared to the requirements of non-residents. Many of these countries are small, with few natural resources. Development of a finance industry creates jobs and boosts the economy. One way of encouraging the development of the financial services industry is to authorise investment management and life assurance companies to offer products which are attractive to non-residents. This can be done by exempting the products from local income, capital gains or wealth taxes. We live in an increasingly global economy, where goods and services are traded more freely. These tax-free products may be attractive to investors living in other countries. For example, if:

• they pay high tax rates on domestic investment products.

• returns on financial products are reduced because of restrictions on the assets in which they can invest.

• their Country restricts access to capital in their domestic investment products.

A security which carries a fixed rate of interest, normally payable for a pre-determined period. Issuers of such investments may be governments, local authorities and corporations. The bonds may be traded and their value is related to the value of the fixed rate of interest (yield) it provides.

The date when the policy will end is selected at the start and cannot be altered.

At outset there is a fixed term but this may be amended later.

Investors buy and sell shares at the prices calculated at the valuation point immediately following receipt of their order.

A Whole of Life contract requiring a minimum lump sum investment and providing at least the minimum level of death benefit to qualify as a life assurance contract. An individual portfolio of assets can be held within the bond, including equities, bonds, OEICs and many other types of investment as well as collective funds. These normally exclude commodities, coins and other assets which are not easily traded.

A tax on all emoluments received by an individual from any source.

A Whole of Life contract requiring a minimum lump sum investment and providing at least the minimum level of death benefit to qualify as a life assurance contract. This amount varies by country. Collective investments and with profits arrangements can normally be held within the bond. The investor can generally vary his investments within the bond by switching between funds at minimal cost.

The day to day management of a portfolio of assets.

A contract between an individual and a life assurance company wherein the former commits to the payment of a premium or premiums and the latter undertakes to pay out a lump sum or income in the event of death. Originating in the provision of funeral expenses by the prepayment of regular amounts, life assurance has grown into a sophisticated industry concerned as much with the mitigation of tax and provision of savings as with protection. A life assurance contract will pay out a sum on the death of the "life assured", which may be the same person as the holder of the policy or, in certain cases, may be a third party. Some contracts will pay a sum at the end of a specified period of the life assured is not deceased before this date.

A company where the shareholders' liability is limited to the sum originally paid for the shares. In return for this privilege a company accepts obligations such as publishing audited accounts. A plc is a public limited company, a limited company is a private limited company. Private limited companies are much more common than public limited companies. A plc may be listed on the Stock Exchange or the Unlisted Securities Market but does not have to be. Before it can start to trade a plc must have a minimum value of shares issued, a minimum amount of the value must have been paid and it must have at least two directors and a secretary. A private limited company cannot be listed on the Stock Exchange, it can have just one share issued of nominal value and may have just one director and a secretary.

A portfolio, often offered by life assurance companies, linked to a series of funds with the manager of the portfolio determining the day to day management of the assets. The manager, usually the company offering the portfolio, determines the emphasis given to different categories of assets as a matter of investment policy. Products offering managed portfolios typically offer a range with names such as "Cautious", "Balanced" and "Aggressive" portfolios and are often aimed at the less experienced investor who nevertheless wishes to participate in the potential gains available from stockmarket investment.

The date on which a contract ends, normally used to indicate that a sum is payable at this date to the policyholder.

Account for cash where interest is paid, sometimes with stipulated conditions of withdrawal. Capital is generally guaranteed and rates of interest, dependent on general rates prevailing in the market place, is credited on a regular basis during the term of the deposit.

A company without shareholders whose ownership and profits are distributed among members and/or clients of the company. Some life assurance companies and certain charities and clubs are fund as mutual companies where the executives, investors, employees, poliyholders and clients participate in the profits and income from the company.

A pooled investment fund of variable size in corporate form. An OEIC owns investment assets, such as stocks and shares, gilts, bonds and certain other financial instruments. The size of an OEIC varies to reflect the market value of its underlying investments. It will also fluctuate as investors buy and sell shares as the OEIC has more or less property to invest. It is in this sense of fluctuating size that it is open-ended. An OEIC's investors own shares in the company rather than owning units as in a unit trust. The shareholders have the right to sell their shares back to the OEIC on any dealing day when trading has not been suspended. Unlike a unit trust, an OEIC's shareholders have no rights to the underlying assets. However, they do have rights to participate in income (which can be paid as dividends or reinvested) and/or profits arising from the management of and transactions in the scheme property. Every OEIC must be authorised by the Securities and Investments Board.

The term Ordinary Residence as opposed to Residence relates to a person's normal pattern of life and denotes residence in a place with some degree of continuity.

Sometimes specified as voting or non-voting, these shares entitle the holder to the company's earnings and its assets after all prior charges and claims have been met. "A" shares are Ordinary Shares normally without voting rights.

A Product in which the assets held are "wrapped". Unlike direct investments such as unit trusts and shares, the majority of such products have the characteristic that, while the product itself is owned by the investor, the underlying assets are owned and managed by the product Provider. This applies to Managed Portfolios, Investment Bonds and all other Life Assurance based contracts. The exception is the Regular Investment Plan in which the investor contributes to directly-held funds within a framework of regular contributions.

An income paid to an individual having reached a specified retirement age. The term is often used incorrectly to denote the savings plan in which funds are built up ready for the later provision of a pension. A pension is a specific type of annuity and, typically, savings plans that meet certain criteria for the later provision of a pension are given favourable tax treatment by governments as an incentive for the general populace to provide for themselves in later years rather than relying on the state.

A life assurance policy is a contract between two parties - the life assurance company and an individual known as the policyholder. The policy holder contracts to pay certain premium(s) to the company and the company undertakes to pay out a lump sum or income in a specified event. This event may be the death of the life assured (who may be either the policyholder or a third party, subject to restrictions) or the maturity of the policy at a certain date if the life assured is still living at that date.

Preference capital is part of the share capital of a company ranking after creditors in the event of liquidation whilst bearing additional risk. It consists principally of two types: a. Holders of Preference shares have certain preferential rights as to the rate of entitlement to dividends, distribution of surplus and voting. The dividend is payable at a fixed rate and may be cumulative (i.e. a dividend unpaid one year will be payable out of profits for succeeding years) or non-cumulative. b. Participating Preference shares confer a further participation in profits often relaing to the dividends payable on ordinary capital.

The generic term used on our site to encompass all the various investment vehicles offered by different companies, whether these be life assurance contracts or direct investments. SEE ALSO Tax Free Products below.

The company offering a product for sale to investors - or, in the case of certain products that are companies in their own right, the manager of the product. There are two types of organisations providing the Products in SaveTaxFree:-

• Investment Management Companies

• Life Assurance Companies

The name by which a group of providers - or a single provider if not part of a wider group - is known throughout the investment world. For example, the Provider Group name of Allied Dunbar Assurance plc, Allied Dunbar International Assurance Ltd, Allied Dunbar International Fund Managers Ltd and Allied Dunbar International Life Assurance Ltd is simply "Allied Dunbar".

A regular contribution plan offering a range of funds in unitised collective investments. These investments are held directly by the investor.

The official body responsible for supervising and regulating the behaviour of the companies it regulates.

An individual is normally regarded as being resident in a country during any particular fiscal year if he or she has spent a specified number of days in that country within the relevant year.

The term used to indicate a commitment to paying a regular contribution into an investment with the purpose of building up a capital sum in the future.

The ownership of a company is divided between its shareholders - people who have subscribed a sum of money to the company's capital in return for a share of the profits. Shares in public companies are freely transferable on a Stock Exchange. There are several types of shares, such as "A" Ordinary, Ordinary, Preference and Deferred.

Separate classes of shares within umbrella funds are denoted by a letter or number after the name of the fund and are issued to reflect different currencies, different charging structures and/or different types of permissible shareholders.

Acronym for "Societe d'investissement à capital variable" - an open-ended investment company. SICAVs generally hold a range of sub-funds and such SICAVs are often referred to as umbrella funds.

Products included in our directory must be tax-free, available to non-residents and provided by reputable, regulated companies. In this issue, we have selected tax-free products suitable for people who:

• have lump sums of USD 1 000 or more to invest.

• are able to save regular sums of USD 20 a month or more.

• wish to invest for 5 years or more.

• OEICs offering regular contribution plans to help savers build up a shareholding.

• OEICs offering several classes of shares from which investors can make a selection. Each class of shares is invested in different groups of companies. For example, one class might be invested in shares in technology companies, another in, say European companies. These OEICs are called "Umbrella Funds".

• Managed Portfolios - Products aimed at lump sum investors.

• Regular Investment Plans – Products aimed at regular savers.

• Investment Bonds & Other Single Premium Life Products - Life assurance contracts aimed at lump sum investors.

• Life Assurance Plans – All life assurance contracts requiring regular contributions, including endowment, flexible life, and assurance-based regular investment plans.

The period, usually a whole number of years, that a contract will remain in force.

Acronym for undertaking for collective investment in transferable securities - an open-ended investment company with a structure governed by Article 1(2) of Council Directive 85/611/EEC of 20 December 1985.

A collective investment fund which offers a number of sub-funds as part of a single overall fund. These funds generally provide the opportunity for easy and cost-effective exchange or switching between the sub-funds.

A regular contribution life assurance contract which lasts until the death of the life assured and provides a specified death benefit paid on death whenever it occurs. There are various forms of policy:

• Non-Profit Whole of Life - The policy provides a lump sum payable on death. The amount does not change as no bonuses are added.
• With Profit Whole of Life - The policy provides a sum assured which is paid together with bonuses accrued on the death of the life assured.
• Unit-linked Flexible Whole of Life - The policy includes life cover and investment elements which can both be varied during the life of the policy. Contributions are usually payable for life, but some forms of the policy allow larger premiums to be paid for a fixed period after which the policy continues without premiums being payable.

A with profits investment provides a basic guaranteed sum to which annual bonuses are added. These bonuses are declared each year and are irreversible once allocated to the policy. Investments are made into stocks, gilts and other marketable securities. Profits made in years of high investment returns are partly held back and used to raise the bonuses that can be allocated in poorer years. There are two types of bonus -reversionary bonuses and terminal bonuses. With profits plans have less potential for high investment gains than a unit-linked investment but have higher levels of security.