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Julian Gibbs

Scottish Equitable International head of marketing Steven Whalley has launched a marketing initiative for all those companies selling offshore bonds into the UK.

With the help of Axa Isle of Man&#39s Christine Hall, Norwich Union International&#39s Amanda Wilson and Scottish Life International&#39s David Gray, a general brochure is being produced which explains the advantages of offshore bonds for UK residents.

Other companies involved in this project include Canada Life International, CMI, Friends Provident International, Prudential International, Royal Skandia and Zurich International.

This initiative should be of great help to IFAs, especially if the companies get together with supporting editorial and advertising. All the companies concerned should find this much better value than individual advertising.

It is also intended to sponsor independent market research tracking IFA satisfaction. So far only around 30 per cent of IFAs have used offshore bonds even though this is up from fewer than 20 per cent in 1995.

The main advantages of offshore bonds are tax-free roll-up, which is particularly useful for those intending to retire abroad, and the 5 per cent tax-deferred annual withdrawal allowance, which is useful for taxpayers who believe they may be in a lower tax band when they retire.

Trustees can also benefit from the tax advantages of offshore bond investments and a number of companies offer offshore trusts which may be beneficial for investors who want to use bonds for tax planning.

Offshore bonds can also be assigned without tax consequences from a higher-rate taxpayer to a lower-rate taxpayer. Limited companies investing in offshore bonds enjoy tax advantages, too.


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