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have advantages both for UK residents and those living and working
abroad. Anyone can invest offshore, particularly to take advantage
of tax deferral benefits. The most popular offshore investment
centres are Jersey, Guernsey, Dublin, and Luxembourg.
Since offshore funds
are managed offshore, they can invest in areas forbidden to
UK-authorised unit trusts. Such funds can carry various securities,
including investment bonds. When bonds are held in the UK, income is
paid net of tax. Taxes are deducted before a pay-out. With offshore
investment bonds, however, no tax is deducted. This means that
income can accumulate over many years, gross, leading to higher
rates of return. Taxes need only be paid when the money is brought
back into the UK.
Offshore trusts offer
a good way to avoid inheritance taxes. Money put into offshore
trusts can continue to grow untaxed until one's heir comes of age.
Since no taxes are taken out, interest is accumulated on interest,
which helps the money grow faster. Once the heir takes possession of
the trust, he or she will be liable for taxes at the basic rate
unless the heir is considered a higher-rate taxpayer. So long as the
person who established the trust has lived seven years since setting
up the trust, it will not be liable for inheritance taxes.
centres have varying levels of regulation, supervision, and payment
systems. It's important to research them before placing money in
their care. Offshore funds also typically have higher charges than
do UK funds, so one must make sure to check the small print.
Further, since offshore funds are not covered by the UK's financial
regulations, customers are not covered by safeguards as they would
be when investing domestically.
Use an Independent Financial
Customers who want to
invest offshore should talk to an Independent Financial Adviser to
determine if it's the right time in the market, what fees will need
to be paid, and so on. UK citizens living and working abroad should
consult with an IFA to work out tax implications regarding their new
Offshore investments offer ways to diversify one's portfolio,
leverage tax deferrals to create more wealth, and pass wealth on to
heirs. They can be worthwhile, so long as people go about investing
in the right way.
Offshore Investments - probably the largest choice of
Offshore Investments in the UK!