Each type of share has different rights to participate in income and capital returns from the trust's portfolio.

Each type of share within a split trust structure has a predetermined order of priority in entitlement during the life of the trust and repayment at wind-up. Although there is an order of priority, investors should be aware of the rights and entitlements of any prior charges and all share classes within the split structure.

Splits also vary in overall investment policy, objective and strategy; therefore each trust portfolio will be exposed to different potential returns and risk. This in turn affects the potential return and risk characteristics of the share classes within each structure.

At least one share class within a split is likely to have a limited life (usually between 5-10 years) with a fixed wind-up date.

The advantages of splits are that they can provide for a range of investment needs, and if you want to invest for a fixed period, they can give you a specific date for a potential capital payment.

Zeros

Zero dividend preference shares 'zeros' have a limited life. They are set up with the aim of delivering a pre-determined capital return to investors when the wind-up date is reached.

This return is called the redemption value. A zero's rate of growth is also pre-determined by the trust at launch. This means that even if the trust performs better than expected, zero holders will only receive the predetermined redemption value set at launch date.

The redemption value is not a guaranteed return - if the trust performs poorly, the company may not be able to pay out the pre-determined amount.

Zero's do not pay income, so there's no income tax to pay. Any profit on the sale or redemption of a zero is taxable as a capital gain. This makes them tax efficient for people who pay income tax but who do not make full use of their annual Capital Gains Tax allowance.

Income shares

Income shares aim to provide shareholders with regular returns in the form of share dividends.

Some income shares may also have entitlements to some of the trust's capital on wind-up. Any capital entitlement is usually pre-determined by the trust - in other words, it won't be more than a fixed amount, although it could be less.

Ordinary income shares

Ordinary income shares combine the regular dividend payments of income shares, with the prospect of capital growth.

On wind-up, ordinary income shares have no pre-determined capital value - so they are entitled to any surplus assets after prior ranking charges and share classes.

If the trust does well, ordinary income shareholders are likely to do very well, but if it does badly, they fare very badly which makes them higher risk.

Capital shares

Capital shares offer potential for above average capital growth but at high risk. They pay no income and there's no cap on the return at wind-up. Capital shares have the last call on the trust's assets at wind-up. These shares are very high risk.