The tax advantages of offshore bonds are well documented but one in particular – colloquially called time apportionment relief – can offer significant UK tax benefits to internationally mobile individuals.What is time apportionment relief? Tar is a relief from UK income tax available only to holders of offshore bonds. How does it work? A chargeable event gain on an offshore bond is reduced if the policyholder was not UK resident throughout the life of the policy. The chargeable gain is reduced by the fraction A/B where A is the number of days for which the policyholder was non-UK resident during the life of the policy and B is the total number of days for which the policy was in existence (see Table A). Are there any restrictions on the availability of Tar? It is not available in respect of bonds held by nonUK-resident trustees or foreign institutions. What are the rules on trustee residence? A trust is non-UK resident for this purpose where all the trustees are non-UK resident. Where there is a mixture of resident and non-resident trustees, the trustees as a body are regarded as resident unless the settlor was not resident in the UK, not ordinarily resident in the UK and not domiciled in the UK when the settlement was set up and when any later funds were added. What is a foreign institution? This is a company or other body, such as a foundation, which is resident or domiciled outside the UK. In view of the value of the relief, the choice of trustees needs detailed consideration. Are there any additional planning opportunities? The possibility of making top-up investments shortly before returning to the UK should be considered as the entire bond, including the top-up element, qualifies for Tar. If a new bond was started with the funds available for top-up, the non-resident period used in the calculation would be shorter (see Table B). Other investments do not offer a similar advantage. If Alan had held a UK with-profits bond before he moved abroad and continued to hold the bond until his return, he would be taxable on the full gain (with credit at 20 per cent) when the bond was surrendered. If he had owned a portfolio of unit trusts or equities, the capital gains tax legislation applying on a sale while UK resident contains no relieving provisions to reflect the non-resident period. International mobility is clearly on the increase. IFAs with clients whose lifestyle incorporates periods of residence outside the UK should be aware of the planning opportunities available.