Offshore Investments

The specific benefits of an offshore bond depend on your individual circumstances.  However, there are a number of generic benefits for UK residents which tend to apply in most situations:

• Tax efficient investment structure
• Free from Capital Gains Tax
• Greater control over how much, and when, tax is paid
• Superior investment choice from around the world
• Suitable investment for individuals who are looking to reside abroad
• Excellent when planning  to mitigate Inheritance Tax
• Wide range of trust solutions
• Self assessment friendly

Offshore investment bonds were once deemed by many investors as being over priced and indeed, over hyped as an investment vehicle.  However, with the continued massive growth and subsequent evolution in this market this is no longer the case.  Most offshore vehicles are now priced equivalent to a similar standard onshore investment vehicle and are no longer the domain of the few very wealthy in society.  Offshore bonds are now available from as little £6,000.

What are some of the practical reasons for an investor to considering an offshore bond?

Individual investment – offshore bonds are often a far wider investment choice than their onshore equivalents.  Additionally, an offshore portfolio bond is able to utilise the services of a third party discretionary fund manager, such as a stock broker etc.

School, University Fee’s planning – offshore bonds work perfectly for parents or grandparents looking to use funds to meet the cost of their families private or higher education.  The ability to pay no tax on the investment and then be able to pass monies out to a non tax payer virtually free of any tax is almost too attractive to ignore.

Non-residency – any UK citizen looking to spend an amount of time abroad should seriously consider an offshore bond.  Non-residency relief will result in that individual saving a substantial amount in unnecessary tax that they would ordinarily pay if they remained invested in an onshore investment for that same period.

Inheritance tax planning – with the limit before which an individual pays IHT now set at only £325,000, millions of people in the UK find themselves with a real IHT problem.  Offshore investments that are aimed to the appropriate trust vehicle can make a substantial difference to an individual’s estate value for IHT purposes.  With correct long term planning it is possible to even eradicate the problem completely.

Corporate investments – limited companies are now utilising the benefits of tax control that only an offshore bond can offer.  Companies that keep large reserves on cash deposit can now access offshore deposit accounts and can defer the payment of any tax to a point at which it is most advantageous for them to do so, whilst in the interim still being able to retain access to their monies.

Pension fund investors – individuals and companies planning for retirement can now access offshore bonds via a SIPP or SASS investment.  The advantage of an offshore bond is often the amount of access available under the terms of the contract, thus giving more flexibility than a conventional single premium pension contract.

The list goes on.  What is clear however is that seeking professional and independent advice on all of the above is imperative.  Here at Lightblue in Cardiff, we not only have vast experience of dealing in the offshore market, but have access to the very best in tax planning and technical expertise that is available.  As independent advisers that have access to every offshore provider, we choose to deal with only the very best in this industry.