View more on these topics

Julian Gibbs

Offshore life insurance investment bonds are very similar to those in the UK except for their tax treatment. They do, however, have other advantages as well. According to a Merrill Lynch Gemini survey, high-net-worth investors have over 50 per cent of their assets offshore. This is partly because they can get access to funds and investment instruments that are not available onshore.

One example is the Scottish Life International secure investment portfolio, which is linked to the performance of the world&#39s major stockmarkets and offers access to a range of capital-protected funds.

Investments work harder and more efficiently for investors in a tax-efficient environment. First, they are beyond the Inland Revenue&#39s tax reach so the gains on the underlying investments are not taxed at source and are paid gross to investors. Further, an offshore life policy can provide investors with an annual tax-free income, like other investment bonds, of 5 per cent of the original investment for a maximum of 20 years.

An offshore life policy also diminishes self-assessment administration requirements as there is no requirement to include details of an offshore policy on tax returns, unless it is encashed or an income in excess of 5 per cent is taken in any financial year. While UK investors do have to pay tax on the gains when they encash the bond, investors who plan to live abroad will escape all tax liability.

A particularly important point is that offshore life policies also provide an opportunity to ensure avoidance of inheritance tax. One point of warning is that it is illegal not to report to the Revenue any gains made when you encash the policy or if you withdraw more than 5 per cent from it.


LIA puts the focus on selling and planning

Financial advisers wanting to improve their financial planning skills are invited to attend the LIA&#39s workshop in Manchester on August 5.It is designed to help both new and experienced advisers understand the differences between selling financial products and financial planning and to develop the tools needed to provide a comprehensive service to clients.Topics covered include […]

Lincoln outsources admin

Lincoln Financial is outsourcing the administration of its life and pension book to third-party specialist Capita.The £160m deal will see Capita, which offers admin services to firms across various industries, take control of Lincoln&#39s book from the beginning of this month.Capita has launched a new division, Capita Life & Pensions, which will target other providers […]

Misys angers members with October deadline for getting G60 qualification

Mega-network Misys has outraged some members by forcing them to attain the G60 pension qualification by October if they want to continue advising clients on pension transfers and other retirement options.Misys&#39 new rules covering income drawdown, phased retirement, flexible annuities and transfers from occupational to personal pensions are laid out in a memo to all […]

Temple axes 21 managers in restructure

National IFA RJ Temple is axing 21 managers.Ten staff have already stepped down in moves towards transferring all managers on to full-time salaried contracts.The firm previously employed 45 advisers as team managers on a part-time basis. It aims to have a new structure in place by the end of October.Temple expects to cut the number […]

China’s economic bounce may already be over

By Mike Riddell (17 May 2016) Most people would explain the rally in global risky assets since mid-February as being primarily down to the spectacular volte-face from the Federal Reserve, where Janet Yellen (and others) dramatically toned down their narrative that the Fed would be hiking rates as many as four times in 2016. This explanation […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm