Offshore Bonds
Offshore Investment Bonds Explained — Benefits, Structure, and Strategy
An offshore bond is a life insurance policy that is held in an offshore jurisdiction. An offshore bond is a single premium lump sum investment product that can invest into a range of assets.One of the main advantages of investing in this tax wrapper is the potential for tax efficiency as the investor can decide when to pay tax, how much tax to pay and to whom to pay it.
Gross roll-up
You can buy and sell investments within an offshore bond without incurring a taxable event. This is referred to as gross roll-up.
Tax efficient
Upon withdrawal, offshore bonds are taxed favourably as only the gain is taxed.
Special tax rates
Depending on the jurisdiction, the tax rate on the gain can reduce depending on the number of years you have held the money within the wrapper or may be taxed at a lower rate than standard investments.
Succession benefits
Some jurisdictions offer great succession benefits depending on your country of residence.
Multi-Currency
You can invest in any major currency such as GBP, EUR, or USD.
Things to Consider When Investing Into an Offshore Bond
- SJB’s minimum investment of GBP 100,000
- Minimum investment timescale of 5 years
- A clear understanding of which country you will be withdrawing the designated fund from
- Understand who you want as beneficiaries of the policy
- Whether you want to setup the policy as a single or joint investor
- Which currency do you want to setup the plan in
- Whether the benefits and costs outweigh a general investment account