“I have used up my pension and ISA allowance, what next…?” introducing offshore bonds

pension and ISA

What are offshore investment bonds?

Offshore investment bonds, also known as international bonds, are issued by companies outside of the UK. They work as a tax-efficient wrapper, allowing you to save and invest your money without paying tax on any investment growth. These types of bonds are generally suitable for medium to long-term investments of at least five years and are issued in secure jurisdictions with high levels of investor protection, such as the Isle of Man. Offshore investment bonds give you access to a range of assets and investments and allow you to switch your holdings as your investment preferences change.

What are the advantages of investing in an offshore investment bond?

There are several advantages to consider when it comes to investing in an offshore investment bond:

  • Tax efficiency: Offshore investment bonds are a tax-efficient way to save and invest as your money can grow without being eroded by tax.
  • Ability to withdraw capital: You can draw down your funds, up to 5% tax efficiently each year for 20 years, to provide an income in the future.
  • Gifting to family members: Offshore bonds are classed as an ‘assignable asset’ which means they can be transferred as a gift to someone else over the age of 18 or gifted to a trust without incurring Capital Gains Tax. This can be a useful tool for estate planning and gifting to family or friends.
  • Flexibility: It is possible to switch the provider of your bond to another, giving you more investment flexibility and the option to create bespoke portfolios, depending on your personal circumstances and preferences.

Offshore investment bonds can be a useful addition to your overall investment strategy. If you are interested in learning more about how offshore investment bonds can fit into your financial plans, it may be worth seeking the advice of a financial professional.

This article has been prepared without taking into account the investment objectives, financial situation, or
particular needs of any individual reader. You should seek independent financial advice from a licensed financial advisor before making any investment decisions based on the information contained in this article.
The author and publisher of this article do not accept any liability for any loss or damage resulting from the use of this information. Past performance is not indicative of future results, and the value of any investment may go up or down.

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