Offshore bonds explained - how they work and what clients they are suitable for

Offshore bonds have seen a resurgence in interest over the past few months as financial advisers search for ways to help mitigate clients' future inheritance tax (IHT) bills. New investment into offshore bonds in the 12 months to the end of June 2025 hit a record £10.5bn across all providers, more than doubling from £5.1bn the previous year. Offshore bonds are popular for IHT planning as they can be placed into trust or assigned to a beneficiary without triggering an immediate income tax charge, while the original investor can keep withdrawing up to 5% of the original investment each ...