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  • Will You Add? - Making Riskier Investments: How Split Funds Work

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    al investment amount and the capital shares receive the balance. They may be of particular interest to
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    Split funds are investment trusts with a fixed life, where the shares are divided into more than one category. The simplest form is a split between capital shares and income shares, where the income shares receive all the income and the capital shares all the capital growth.

    Capital shares are more risky because at the end of the investment period the income shares are paid back at, usually, the original investment amount and the capital shares receive the balance. They may be of particular interest to

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    ategory. The simplest form is a split between capital shares and income shares, where the income shares receive all the income and the capital shares all the capital growth.

    Capital shares are more risky because at the end of the investment period the income shares are paid back at, usually, the original investment amount and the capital shares receive the balance. They may be of particular interest to

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    receive all the income and the capital shares all the capital growth.

    Capital shares are more risky because at the end of the investment period the income shares are paid back at, usually, the original investment amount and the capital shares receive the balance. They may be of particular interest to

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    sky because at the end of the investment period the income shares are paid back at, usually, the original investment amount and the capital shares receive the balance. They may be of particular interest to
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    al investment amount and the capital shares receive the balance. They may be of particular interest to higher rate taxpayers as there is no income tax to pay, only capital gains tax at the end.

    Income shares are less risky and may be of more interest to those needing income, such as pensioners.

    There are other variations:

    • Zero dividend preference, shares (zeros), which receive no income during the investment period. Instead they are repaid at a fixed amount on redemption, which is

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