Offshore Investments
The specific benefits of investing offshore depend upon your individual circumstances. There are however a number of generic benefits to UK residents.
Investing in an offshore bond for example can be more tax efficient and is worth discussing with your adviser.
- Virtual tax-free growth
This is often referred to as the ‘gross roll-up’ effect, whereby the offshore bond grows free of year-on-year income tax and Capital Gains Tax charges, unlike comparable onshore bonds.
- No Capital Gains Tax
Subject to the use of the Capital Gains Tax annual exemption amount, offshore bonds provide a more tax efficient structure for active investment management.
- Tax Control
Tax deferment is a key feature of offshore bonds compared with an onshore bond as you have greater control on how much, and when income tax is paid. This enables investors to choose when a tax charge may occur.
As offshore bonds are long-term investments, there may be some charges which apply if money is withdrawn in the early years.
Investing offshore can be confusing as there are a number of issues that need to be considered therefore it is important to seek independent financial advice.
There can be higher charges associated with investing offshore.
