Offshore Investments - Utilising tax deferral benefits
For the appropriate investor looking to achieve capital security, growth or income, there are a number of advantages to investing offshore, particularly with regards to utilising the tax deferral benefits. You can defer paying tax for the lifetime of the investment, so your investment rolls up without tax being deducted, but you still have to pay tax at your highest rate when you cash the investment in. As a result, with careful planning, a variety of savers could put offshore investments to good use.
Offshore Investment Vehicles
The investment vehicles are situated in financial centres located outside the United Kingdom and can add greater diversification to your existing portfolio.
Cash can also be held offshore in deposit accounts, providing you with the choice about when you repatriate your money to the UK, perhaps to add to a retirement fund or to gift to children or grandchildren.
Those who work overseas or have moved abroad to enjoy a different lifestyle often want to pay as little tax as is legally possible.
Offshore Tax
Many offshore funds offer tax deferral. The different types of investment vehicles available offshore include offshore bonds that allow the investor to defer tax within the policy until benefits are taken, rather than be subject to a basic rate tax liability within the underlying funds. This means that, if you are a higher rate tax payer in the UK, you could wait until your tax status changes before bringing your funds (and the gains) back into the UK.
Investment Types
The wide choice of different investment types available include
- offshore redemption policies
- personalised policies
- offshore unit trusts and OEICs.
You may also choose to have access to investments or savings denominated in another currency.
Many banks, insurance companies and asset managers in offshore centres are subsidiaries of major UK, US and European institutions. If you decide to move abroad, you may not pay any tax at all when you cash-in an offshore investment, although this depends on the rules of your new country.
Advice on Investing Overseas
For more information on benifts of investing overseas speak to one of our partner firms independent investment advice teams from one of our partner firms today for a no obligation investment consultation.
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