For holders, the company said, the distribution will be a tax-free return of capital, assuming they paid more than $20 for their shares.

Is a tax-free, index-linked return of 10pc a year too good to be true?

When distributions are finally made, each payment is partly taxable and partly a tax-free return of the purchaser's own money.

And will it cripple the municipal bond market, where tax-free returns are the main attraction?

The average win is apparently around $27.50, giving a tax-free return of around 3.4% .

Sometimes investors receive a distribution that is a tax-free return of capital.

That would preserve the amount of money available to generate tax-free returns.

Municipals remain popular with higher-income people, who have fewer opportunities for tax-free or tax-deferred returns.

Thereafter, cash flow will be a tax-free return of your own money.

As you might expect from an investment plan that offers tax-free returns, there is a limit to the amount you are allowed to invest each year.