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Risk warnings and important information
None of the content above should be considered to constitute investment advice. Individuals’ objectives and circumstances vary and as such appropriate investments for one may not be appropriate investments for all.
Past Performance is a poor indicator and certainly no guarantee of future performance.
Investments can fall as well as rise, and may fall considerably.
The value of investments is not guaranteed and you may not receive back the full amount invested.
The tax treatment of investments such as these, including the initial tax relief available, are dependent on the investment vehicle successfully maintaining qualifying status throughout its life.
Many tax advantaged investments are high risk investments and we strongly recommend investors do not consider investing on the basis of this information alone or investing without obtaining financial advice from an appropriate source.
Investments in small companies are speculative and the promise of higher potential returns comes with a commensurately higher risk of capital losses.
*Definition of a failed investment is the loss of 50% or more of the original investment.
All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change.

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Offshore investment – bonds, tax, benefits

Offshore investment – bonds

The main tax benefit of investing in an offshore bond is gross roll-up. Gross roll-up means that any underlying investment gains are not subject to tax at source – apart from an element of withholding tax.

Investment in a bond gives you the flexibility of investing now, and enjoying returns on your investment, with no tax payable.

An offshore bond (wrapper) is ideal if you are:

  • Planning to move abroad
  • You expect to be a non-taxpayer
  • A basic rate taxpayer when you finally retire or, more importantly, when you cash in your bond.

Offshore investment – tax

A charge to income tax can only occur on the trigger of a chargeable event while you are a UK resident, caused by any of the following:

  • Death
  • Partial encashment exceeding more than 5% of the original investment amount per year
  • Assignment for money, or money’s worth
  • Full encashment.

HMRC considers the 5% amount coming from an offshore investment bond as return of original capital, rather than coming from any income generated within the bond, and therefore not taxable.

Offshore investment – main benefits

  • The ability to switch from cash deposits into collective investments with no initial costs
  • No initial charge to go into the funds available within the bond wrapper
  • They are deemed as a non-income producing asset, therefore unlikely to generate a potential income tax liability, unless it’s a chargeable event
  • Underlying investments can be held within an offshore investment bond can range from cash deposits to collective investments
  • An offshore bond wrapper defers immediate liability to UK income tax and allows you to extract up to 5% per annum, on a cumulative basis of your initial capital investment amount.

Offshore investments – Compare The Financial Markets

As with every potential investment decision, careful consideration and thorough research is absolutely vital. 

Talk to the experts at Compare The Financial Markets.

Compare overseas investment and offshore investment bonds and funds for 2018

As in all things, when comparing offshore / overseas investments, advice should be sought from experts.

Choosing the best offshore / overseas investment can be difficult, so careful consideration is crucial. Your questions on the best offshore / overseas investment will be answered by our industry experts, free of charge. 

To help you through the multitude of choices, enter your details below and let the Compare The Financial Markets experts find the best offshore / overseas investment for you.

Offshore Investments

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