Putting together the taxation of an investment wrapper with the right advice for clients is not always easy. Murray Drummond outlines some key facts about offshore bond taxation to help the decision making
Offshore bonds benefit from virtually tax-free growth within their funds. The only tax paid is non-reclaimable withholding tax - this can make an offshore bond an attractive option for clients who will not be paying UK tax in the future. For example, where money is earmarked for a non-taxpayer, such as a child, or where the client plans to move abroad. Tax will not be payable on bond gains until a chargeable gain happens. For example, when the bond is fully cashed in or when the bond comes to an end on the death of the last person covered. Offshore bonds have a tax deferred allowance of 5...
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