Aip Key Facts V2 March 2011

1 Copyright 2011 © Asset Income Plan Asset Income Plan Ltd. 9 Devonshire Square, London, EC2M 4YF V2 – 30.03.2011

ASSET INCOME PLAN

Key Facts Document

Important Information

This is an important document which you should

keep along with the enclosed Personal Illustration

This Key Facts Document gives you the main points about the Asset Income Plan (“the

Plan”) you are considering. The illustration shows the income you may get in the

future. Please read this Key Facts Document with your illustration and keep them with

your Plan documents in a safe place.

The Product:

The Asset Income Plan.

The Aims:

To provide you with a regular quarterly income to help meet your financial commitments. This is

intended to supplement your current income.

Your Commitment:

To give us all the information we ask for when applying for the Plan, in order for us to establish its

suitability for you.

To agree to assign up to 50% of the value of your property to an Insurance Company for the 10 year

term of the Plan in exchange for a quarterly income.

To ensure that your property has adequate buildings insurance in place during the term of the Plan.

To tell us immediately should the property need to be sold for reasons of death, divorce, bankruptcy,

move to a care home or moving home.

To let us know in advance whether you would like the Plan to be renewed/extended at the end of the

term.


Risks:

Although 50% of the value of your property will be assigned to an Insurance Company, the Insurer will

arrange re-insurance so that, should the Insurer become insolvent, the re-insurance will pay off the

charge and you will not therefore be required to sell your property.

Q & As:

Who is eligible for this Plan?

The Plan is available to anyone from age 18 upwards, as long as the asset they own is

mortgage free and situated in the UK. If you are a non-UK resident and you own a property

with no mortgage situated in the UK, you will also be eligible.

The plan can also be taken out by Trustees or companies.

How does the Plan work?

A charge is registered on your property and assigned to an Insurance Company, who in turn

will pay a regular income to you. The amount of income is fixed for the 10 year term and is

payable quarterly in arrears, gross with no tax deduction, although you may be liable for

income tax at your marginal rate.

Is there a minimum property value?

The minimum property value for this Plan is £100,000. Further charges on the same property

for this Plan are not allowed.

Is there a maximum property charge?

The maximum property charge is £5,000,000 (five million pounds).

Is there a property charge range?

The maximum percentage charge is 50%, however, lower percentage rates can be applied for,

ranging from 10% to 50%, subject to certain limits.

What types of property qualify for this Plan?

Property located only in the UK, including England, Scotland, Wales and Northern Ireland, will

qualify for the Asset Income Plan. The following property types will qualify:


UK Residential Property:

Main residence

2nd home

Buy to let

Furnished holiday lets

UK Commercial Property:

Offices

Warehouses

Retail Units

Storage Units

Sports and Social Clubs

Pubs, Clubs and Restaurants

Hotels including Bed & Breakfast

Care homes and Rest homes

Garages

Showrooms

and any other type of commercial property

How much income will I receive?

Regular income payments are set up at inception equal to 5% of the charge amount per

annum, payable to you quarterly in arrears. This amount is fixed and is not affected by

movements in property values during the lifetime of the Plan.

What about tax?

The regular income is paid gross on a quarterly basis. It is your responsibility to declare the

income and pay the appropriate tax.

In the event of a jointly owned property, the income is treated as follows. For joint tenants the

income is treated as being payable in equal amounts to each party and each is responsible for

meeting their own tax liabilities. For tenants in common the income is divided as per the

percentage division of the property and each is responsible for meeting their own tax

liabilities.

In the event of a property owned by a company, trust, commercial or charitable organisation,

the income will be payable to the deed holder who should account for the income for tax

purposes.


What happens at the end of the Plan?

On the 10th anniversary, the Plan will end and the charge will be lifted from the property. All

income payments will cease. There will be an option to renew the Plan for a further 10 years,

subject to the terms and conditions applying at that time.

What are the costs and charges?

Initial charge

There is a standard survey fee for all residential properties, payable on application, of £65

including VAT. For UK commercial property the survey fee operates on a tiered basis as

shown in Appendix 1.

Legal Advice

No legal advice is offered by the product provider. However, you will have the opportunity

to seek legal advice prior to proceeding. Any cost for this advice will be met by you.

What are the early exit options?

Residential:

You can exit the plan before the end of the 10 year term, under a select number of

conditions:

Death

Divorce

Move to a care/rest home

Bankruptcy

Property Sale

In all of the above cases, a 90 day notice period would apply, during which time there

would be no further income payments made.

Commercial:

You can exit the plan before the end of the 10 year term, under a select number of

conditions:

Death

Divorce

Insolvency

Administration


Property Sale

In all of the above cases, a 180 day notice period would apply, during which time there

would be no further income payments made.

What happens if the property owner dies during the term of the Plan?

If the plan holder dies during the 10 year term, the income will continue to be paid to the

deceased’s beneficiaries until the plan finishes after 10 years. However, if the beneficiaries

prefer, the plan could terminate with the standard notice period being served.

After the 10th anniversary the plan will finish and the charge will be lifted.

Do I have to insure the property?

You must ensure the property is fully insured for the cost of re-building the property. Failure

to do so would mean that the Plan would cease and all income payments stop.

Asset Income Plan Limited reserve the right to inspect the certificate of insurance from time to

time.

In the event of a fire, flood or other natural disaster the plan will continue as long as the

insurance policy in place returns the property to its original value. Should the necessary

rebuild not take place the Plan will be cancelled under the Early Exit clause of 90 days for

residential property and 180 days for commercial property during which time no further

payments will be made. Should insurance cover not be available when required the Plan will

be cancelled immediately and a penalty equal to 90 days income for residential property and

180 days income for commercial property will be payable.

If I am receiving any state benefits, will my eligibility for them be affected?

If you are receiving means tested benefits, the extra income you receive from this Plan may

affect your eligibility for them. You should refer to the relevant benefits agency for further

information on this matter and take further advice from your financial adviser.

What if I change my mind?

You have 14 days from the date of offer to change your mind and cancel the Plan, without

incurring a charge or penalty. Outside of the 14-day “cooling off” period the Plan can only be

cancelled in line with the Early Exit options detailed above.

The Asset Income Plan is governed by the laws of England and Wales.


Appendix 1:

UK Commercial Property Survey Costs

Market Value Fee

From To Exc. VAT

£1 £1,000,000 £950

£1,000,001 £2,000,000 £1,750

£2,000,001 £3,000,000 £2,250

£3,000,001 £4,000,000 £2,750

£4,000,001 £5,000,000 £3,250

£5,000,001 £6,000,000 £3,750

£6,000,001 £7,000,000 £4,250

£7,000,001 £8,000,000 £4,500

£8,000,001 £9,000,000 £4,750

£9,000,001 £10,000,000 £5,000

£10,000,001 and above POA

Aip Key Facts V2 March 2011

Economy & Finance

Transcript of Aip Key Facts V2 March 2011