Tax Benefits Of Offshore Investment Bonds

Are you looking for a way to make savings through investments that are potentially tax-free? Offshore investment bonds are well suited to those who wish to avoid certain U.K. taxes because they are not held under U.K. jurisdiction. Offshore bond investments, unlike their onshore counterparts, are not subject to the same taxes e.g. income tax, gains tax, corporation tax. With offshore bonds, the invested funds tend to grow quickly which is why they are often preferred to onshore bonds. Providing the investor withdraws less than 5% of the investment per year, there is no tax liability until the entire investment is cashed out in full.

There are many tax related benefits for offshore investments. If you are a U.K. taxpayer, it is possible to defer the tax until the time where you cash out the whole investment fund, or more than 5% of the investment (the agreed allowance per year). Even if you do cash out more than the allotted tax deferral allowance, it is possible to minimalise the amount of U.K. tax which is applied. If you become a resident in another country i.e. non-U.K resident, or stop being a taxpayer, you can withdraw money from your investment bonds without tax being added and all of the capital gains will be tax-free also. If in a relationship with someone who does not have to pay taxes (even if you have to yourself) placing the offshore bonds in their name will help you to avoid some of the possible U.K. tax charges. Less tax means more capital gain!

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