Offshore Investments

Offshore Investments
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For some individuals looking to benefit from private wealth management, the various advantages of investing offshore can be a key draw to the sector. The primary and most famous (or infamous) benefit is the tax advantages that comes with offshore investment opportunities. One of these is that you can defer paying tax for the lifetime of an investment meaning the investment continues without tax being deducted, although you are still require to pay tax at your resident countries rate when you finally withdraw your investment. However, the use of tax havens to avoid even further these tax implications.

Officially, the OECD has stated that there are three main boxes to be ticked in order to class a country as a tax haven and there list of current tax havens is quite extensive. The first part of this criteria is the most obvious in that they charge nominal or no taxes either corporation tax and/or personal income tax. Alongside this they must actively promote themselves as being a place where the high-taxes of OECD members, can be avoided. The second of the three main requirements is that the country concerned has a strict set of laws in place which protects the privacy of citizens and businesses against scrutiny by international tax authorities. Finally, and closely connected with the previous point, is a lack of transparency when it comes the legislative, legal or administrative provisions. The OECD believes that laws should be applied openly and consistently and information should be made available to foreign authorities when necessary.

The investment fund options are based in financial centres outside of the higher taxation countries such as the United Kingdom or United States and can add an increased level of diversity to your current portfolio. There also various saving options offshore with the option to hold funds offshore in deposit accounts offering an option as to when an investor would like to bring the money back into the UK, whether it be a year or so or perhaps as a retirement or inheritance saving. Many people who live overseas and even some within the UK wish to pay as little tax as legally allowed.

Many offshore funds offer tax deferral on any investments made within it. The various forms of investment vehicles available offshore include offshore bonds that allow the investor to defer tax within the policy until benefits are taken, rather than be subject to a basic rate tax liability within the underlying funds. This means that, if an investor was a higher rate tax payer in the UK, they could wait until their tax status changes before bringing your funds (and the gains) back into the UK. The wide choice of different investment types available include offshore redemption policies, personalised policies, offshore unit trusts and OEICs. They may even choose to have access to investments or savings denominated in another currency.

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