Tax efficient investments outside of the UK
Holding money offshore is common practice and perfectly legitimate, if you have a pension fund then it’s likely that you already hold some offshore investments in it.
An offshore investment is one that holds your money outside the UK. Offshore is a common term that is used to describe a range of locations where companies could offer customers growth on their funds that is largely free from tax. Locations such as the Channel Islands and Isle of Man, and other locations such as Dublin are all “true offshore” locations. Tax treatment varies from one type of investment to another, and from one market location to another. A wider choice of funds may be offered from Offshore bonds. An investment company can be physically based in the UK, but still run funds that are registered elsewhere, at first glance this may make some offshore investments harder to identify. Funds registered outside the UK may be subject to different regulations. The UK has ‘double taxation’ treaties with numerous countries, preventing you from being taxed in the country where the fund is based.
Also see tax efficient investment planning.
The main difference between UK investment bonds and offshore investment bonds is that tax is payable on gains made by the prime investment with UK investment bonds. No income or capital gains tax is payable on the underlying investments for offshore investments.