Financial Adviser Hertfordshire

Offshore Investments for UK Investors

Investing offshore means placing money with investment companies that are based outside of the investor’s home country.

For UK investors, there are no barriers to investing outside of the UK although and in many situations there are advantages to doing so.

In general most people choosing to invest offshore will choose a location where they will pay very little local tax.  There are many offshore centres that offer this attractive feature.  For UK investors the main centres are:

• Isle of Man (Manx)
• Jersey
• Guernsey

The reasons why these are so popular are

• Tax laws that are especially favourable to UK residents
• English speaking and with a very Britsh feel
• They are especially well geared up to cater for UK residents
• Physical location is close to the UK if you need to visit the institution in person
• Many UK financial services companies and banks have subsidiary operataions in these locations
• Very strong invstor protection

Other locations often used are

• Luxembourg
• Switzerland

These are attractive to clients who prefer a more European feel to the company they are dealing with.  Some of the most upmarket and exclusive institutions are based in these two locations and privacy laws are especially strong.

Offshore investments are some of the most tax efficient investments. They can help you multiply your assets by making your money work hard for you while you enjoy the luxuries the offshore investment returns buy for you. Reputable offshore companies offer fiscally sound, time-tested and legal bond and equity assets. These investments give benefits like:

Tax Reduction: There are countries that favour foreign investors. Thus, they give tax incentives to the investors. They have favorable tax rates and promote a healthy investment environment. The investors do not engage in local operations, so little or no tax is imposed on them.

Asset Protection: Offshore investment locations can give you good opportunity for restructuring assets ownership. If you are hassled by lawsuits or lenders foreclosing on outstanding debts then you can transfer some of your assets to an offshore entity.

Confidentiality – Offshore investments could also mean benefit of secrecy legislation. For example you can enjoy banking confidentiality and corporate confidentiality. However, this confidentiality does not mean that offshore investors have an illegal background. They are usually high profile investors who can get significant financial and legal advantage if their identity is kept secret.

Diversification of Investment – By investing offshore you can diversify your investment portfolio to a great extent. The offshore investment market may offer better and more diverse investment opportunities that local investment markets. This is especially true if you invest in developing economies and more so for those countries that are beginning to privatize sectors that were formerly under government control.

Offshore investments can help you defer the taxes. They give you a secured financial future with the added advantage of anonymity. You may invest in real estate offshore and make gold out of dirt. Likewise there are many investment avenues open for you offshore.

One especially tax efficient entity is the Offshore Life Assurance Bond.  Although technically a life insurance policy, the bond is not designed to provide financial protection.  The insurance benefit is simply the return of the value of the investment.  Despite this they are still viewed by the UK Inland Revenue as life assurance policies for tax purposes.  This means that all capital gains and importantly all income generated by investments is not immediatly taxed.

This alternative tax treatment offers some very clever but entirely legal and legitimate opportunities for tax avoidance  through financial planning.

To ensure the best advantage is taken of these tax planning opportunities it is best to take independent financial advice.

Offshore Life Assurance Bonds are especially attractive for UK higher rate income tax payers and limited companies.